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CASES 


ON 


THE   LAW   OF   AGENCY 


To  accompany  this  volume : 
ELEMENTS  OF  THE  LAW  OF  AGENCY.     By  Ernest 

W.    HUFFCUT. 


CASES 


ON 


THE  LAW  OF  AGENCY 


EDITED   BY 

ERNEST  W.  HUFFCUT 

PROFESSOR  OF  LAW  IN   CORNELL  UNIVERSITY  SCHOOL  OF  LAW 


BOSTON 
LITTLE,  BROWN,  AND  COMPANY 

1896 


Copyright,  1895, 
By  Ernest  W.  Hcffcut. 


334  \2L 


University  Press: 
John  Wilson  and  Son,  Cambridge,  U.S.A. 


NOTE. 

The  cases  which  follow  are  arranged  in  accordance 
with  the  analysis  of  the  editor's  work  on  the  Law  of 
Agency  in  this  series.  The  section  number  printed  be- 
fore the  title  of  a  case  refers  to  the  section  of  the  text- 
book where  the  point  involved  in  the  case  is  discussed. 
This  arrangement  has  rendered  unnecessary  any  annota- 
tion of  the  cases  themselves. 

Statements  of  fact  have  often  been  rewritten  and 
abridged.  Portions  of  opinions  irrelevant  to  the  point 
under  discussion  are  omitted,  but  such  omissions  are 
always  indicated. 

No  head-notes  have  been  used :  but  the  cases  are 
grouped  under  topics  in  such  a  manner  that  the  student 
will  know  what  he  has  to  search  for  in  the  case  without 
knowing  what  the  result  of  his  search  is  to  be. 


E.  W.  H. 


Cornell  University  School  of  Law, 

December,  1895 


TABLE  OF  CONTENTS. 


-♦- 


Page 

Table  of  Cases xiii 


INTRODUCTION. 

T.   Preliminary  Topics 1 

1.  Distinction  between  agent  and  servant      ....  1 

2.  Construction  of    words   descriptive  of  service  in 

statutes 3 

3.  Same  representative  as  both  agent  and  servant  .     .  9 


PART   I. 

FORMATION  OF  THE  RELATION. 

II.   Formation  of  the  Relation  by  Agreement      .    .  12 

1.  Agreement  by  contract  or  conduct  necessary      .     .  12 

2.  Consideration  necessary  as  between  principal  and 

agent 18 

3.  Competency  of  parties 18 

o.  Infant  principals 18 

b.  Insane  principals 24 

c.  Married  women  as  principals 29 

d.  Unincorporated  societies  as  principals  ...  29 

e.  Competency  of  agent 30 

4.  Form  of  contract  of  appointment 32 

a.  Under  the  Statute  of  Frauds 32 

b.  In  execution  of  sealed  instruments   ....  35 

III.   Formation  of  the  Relation  by  Ratification  .     .  39 

1.  Act  must  be  performed  in  behalf  of  existing  prin- 

cipal       39 

2.  Assent  may  be  express  or  implied 47 


VU1  TABLE  OF  CONTENTS. 

Page 

3.  Silence  may  amount  to  ratification 57 

4.  Assent  must  be  in  toto  and  unconditional      ...  63 

5.  Assent  must  be  free  from  mistake  or  fraud   ...  66' 

6.  Rigbt  of  third  party  to  recede  before  ratification     .  73 

7.  Competency  of  principal 84 

8.  Form  of  ratification 85 

9.  Legality  of  act  ratified 88 

10.  Legal  elfects  of  ratification 94 

IV.   Formation  of  the  Relation  by  Estoppel  .    .    .    101 

V.   Formation  of  the  Relation  by  Necessity    .    .    110 

VI.   Termination  of  the  Agency 126 

1.  By  accomplishment  of  purpose 126 

2.  By  revocation 130 

3.  By  change  affecting  subject-matter 137 

4.  By  death 141 

5.  By  insanity 144 

6.  Irrevocable  agencies 144 


PART  II. 

LEGAL  EFFECT  AS  BETWEEN   PRINCIPAL  AND  AGENT. 

VII.  Obligations  of  Principal  to  Agent      ....  151 

1.  Compensation  for  authorized  act 151 

2.  Compensation  for  unauthorized  act 153 

3.  Compensation  for  gratuitous  service      ....  154 

4.  Compensation  after  revocation  of  agency  .     .     .  155 

5.  Compensation  after  renunciation  of  agency    .     .  160 

6.  Compensation  where  agent  acts  for  both  parties  164 

7.  Reimbursement  and  indemnity 170 

VIII.  Obligations  of  Agent  to  Principal      ....  177 

1.  Obedience 177 

2.  Prudence 179 

3.  Good  faith 182 

4.  Accounting 185 

5.  Appointment  of  sub-agents 188 

6.  Obligations  of  gratuitous  agents 199 


TABLE  OF   CONTENTS.  ix 


PART  III. 

LEGAL  EFFECT  AS  BETWEEN  PRINCIPAL  AND  THIRD 
PARTIES. 

Page 

IX.   Contracts  of  Agent  in  Behalf  of  a  Disclosed 

Principal 203 

1.  Contracts  apparently  authorized 203 

2.  Factors 223 

3.  Brokers 226 

4.  Auctioneers 226 

5.  Attorneys-at-law 227 

6.  Bank  cashiers 228 

X.   Contracts  of  Agent  in  behalf  of  Undisclosed 

Principal 232 

1.  Liability  of  undisclosed  principal:  general  rule  .  232 

2.  Same :  exception  as  to  state  of  accounts   .     .     .  237 

3.  Same:  exception  based  on  election 246 

4.  Same:  exception  as  to  sealed  instruments      .     .  248 

5.  Same:  exception  as  to  negotiable  instruments   .  253 

6.  Rights  of  undisclosed  principal:  general  rule    .  253 

7.  Same:  exception  as  to  state  of  accounts  .     .     .  257 

8.  Same :  exception  as  to  exclusive  credit  to  agent .  260 

XI.   Admissions  and  Declarations  of  Agent   .     .     .  265 

XII.   Notice  to  the  Agent 271 

XIII.   Liability  of  Principal  for  Torts  of  Agent     .  282 

1.  Liability  for  torts  generally 282 

2.  Fraud  for  benefit  of  principal  282 

3.  Fraud  for  benefit  of  agent:  fictitious  stock   .     .  290 

4.  Fraud  for  benefit  of   agent:   fictitious  bills  of 

lading 299 

5.  Fraud  for  benefit  of  agent :  forged  telegram      .  306 

6.  Liability  for  crimes  of  agent 311 

7.  Liability  for  torts  of  sub-agent 314 

8.  Liability  of  public  principal 319 

9.  Liability  of  public  charity 321 


X  TABLE   OF   CONTENTS. 

Page 

XIV.  Liability  of  Third  Person  to  Principal  .    .    .  326 

1.  Liability  upon  contracts 326 

2.  Liability  for  money  paid  under  duress,  mistake, 

etc 326 

3.  Liability  for  property  diverted  by  agent   .     .     .  328 

4.  Liability  for  collusive  fraud 334 

5.  Liability  in  equity  for  trust  funds  diverted  by 

agent 341 


PART   IV. 

LEGAL  EFFECT  AS  BETWEEN  AGENT  AND  THIRD 
PARTIES. 

XV.   Contract  Relations  between  Agent  and  Third 

Party 347 

1.  Liability  of  agent  upon  an  unauthorized  con- 

tract     347 

2.  Liability  of   agent  who   acts  for  incompetent 

principal 354 

3.  Liability  of  agent  who  acts  for  fictitious  prin- 

cipal    355 

4.  Liability  of  agent  to  whom  exclusive  credit  is 

given 356 

5.  Liability  of  agent  who  acts  for  a  foreign  prin- 

cipal    359 

6.  Liability  of  agent  who  executes  sealed  contract 

in  his  own  name 360 

7.  Liability  of  agent  who  executes  negotiable  in- 

strument in  his  own  name 360 

a.  Construction  from  signature  alone  ....     360 

b.  Construction  from  signature  and  recitals     .     363 

c.  Construction  from  signature  and    marginal 

headings 369 

d.  Indorsers  of  bills  and  notes 377 

8.  Liability  of  agent  who  executes  simple  contract 

in  his  own  name 380 

9.  Liability  of  agent  arising  from  interest  in  sub- 

ject-matter    383 

10.   Where  neither  principal  nor  agent  is  bound  .     .    384 


TABLE   OF   CONTENTS.  XI 

Page 

11.  Liability  of  agent  for  money  received  through 

mistake  or  fraud 385 

12.  Liability  of  third  person  to  agent 388 

XVI.   Torts  between  Agent  and  Third  Party  .    .    .  389 

1.  Liability  of  agent  for  non-feasance      ....  389 

2.  Liability  of  agent  for  misfeasance 397 


INDEX 403 


TABLE  OF  CASES  REPORTED. 


Page 

— Ahem  v.  Baker,  34  Minn.  98 129 

Allen  v.  Bryson,  67  Iowa,  591 18,  154 

Atlee  v.  Bartholomew,  69  Wis.  43 84,  n. 

Baird  v.  Shipman,  132  111.  16 393 

Baker  v.  New  York  Nat.  Ex.  Bk.,  100  N.  Y.    31  .    .    . 188,  341 

—Baldwin  Bros.  v.  Potter,  46  Vt.  402 186 

Baltzen  v.  Nicolay,  53  N.  Y.  467 352,  385 

Bank  of  Batavia  v.  N.  Y.  &c.  Ry.  Co.,  106  N.  Y.  195 303 

Barwick  v.  Eng.  Joint  Stock  Bk.,  L.  R.  2  Ex.  259 282 

Benjamin  v.  Dockhain,  134  Mass.  418 110 

-  Bentley  v.  Doggett,  51  Wis.  224 212 

Beymer  v.  Bonsall,  79  Pa.  St.  298 246 

Biggs  v.  Evans,  1894,  1  Q.  B.  88 330 

•  Blackstone  v.  Buttermore,  53  Pa.  St.  266 133 

Bolton  Partners  v.  Lambert,  L.  R.  41  Ch.  D.  295 75 

Bradish  v.  Belknap,  41  Vt.  172 109,135 

Bradlee  v.  Boston  Glass  Mfy.,  16  Pick.  (Mass.)  347 363 

Bray  v.  Gunn,  53  Ga.  144 100, 179 

Briggs  v.  Partridge,  64  N.  Y.  357 248,  360,  382,  388 

British  Mut.  Bk.  Co.  v.  Charnwood  Forest  Ry.  Co.,  L.  R.  18  Q.  B.  D.  714  .    290 

Bronson's  Executor  v.  Chappell,  12  Wall.  (U.  S.)  681 101,  206 

Brookshire  v.  Brookshire,  8  TredelPs  Law  (N.  C),  74 130 

•Broughton  v.  Silloway.  114  Mass.  71 226 

Bunker  v.  Miles,  30  Me.  431 185 

Byrne  v.  Massasoit  Packing  Co.,  137  Mass.  313 211 

Cannell  v.  Smith,  142  Pa.  St.  25 164 

Carpenter  v.  Ins.  Co.,  135  N.  Y.  298 280 

Casco  Nat.  Bk.  v.  Clark,  137  N.  Y.  307 374 

Central  Trust  Co.  v.  Bridges,  16  U.  S.  App.  115 12 

Chipman  v.  Foster,  119  Mass.  189 373 

«  Combs  v.  Scott,  12  Allen  (Mass.),  493 68 

Comfort  v.  Graham,  87  Iowa,  295 355 

Commercial  Bank  v.  Norton,  1  Hill  (N.  Y.),  501 188 

Commonwealth  v.  Kelley,  140  Mass.  441 311 

Commonwealth  v.  Wachendorf,  141  Mass.  270 312 

— Conkeyt;.  Bond,  36  N.  Y.  427 183 


XIV  TABLE  OF  CASES  KEPORTED. 

Page 

Constant  v.  University  of  Rochester,  111  N.  Y.  604 274 

—Cutter  v.  Gillette,  163  Mass.  95 155 

D'Arcy  v.  Lyle,  5  Binney  (Pa.),  441 172 

-  Davis  v.  Maxwell,  12  Met.  (Mass.)  286 163 

Daylight  Burner  Co.  v.  Odlin,  51  N.  H.  56 208.  225,  n. 

Delauey  v.  Kochereau,  34  La.  Ann.  1123 389 

Delano  v.  Case,  121  111.  247 199 

-  Denipsey  v.  Chambers,  154  Mass.  330 94,  282 

Distilled  Spirits,  The,  11  Wall.  (U.  S.)  356 271 

Dodge  v.  Hopkins,  14  Wis.  630 81 

Drew  v.  Nunn,  L.  R.  4  Q.  B.  D.  661 24,  109, 144 

Eberts  v.  Selover,  44  Mich.  519 63 

Elledge  v.  Railway  Co.,  100  Cal.  282 269 

Farmers'  Loan  &  Trust  Co.  v.  Wilson,  139  N.  Y.  284 143,  n. 

Fifth  Ave.  Bk.  v.  Forty-second  St.  &c.  Ferry  Co.,  137  N.  Y.  231     ...    295 

Fire  Ins.  Patrol  v.  Boyd,  120  Pa.  St.  624 321 

Flesh  v.  Lindsay,  115  Mo.  1 1, 29 

Fradley  v.  Hylaud,  37  Fed.  Rep.  49 240 

Frankland  v.  Johnson,  147  111.  520 366 

Friedlander  v.  Texas  &  Pacific  Ry.,  130  U.  S.  416 299 

Gardner  v.  Gardner,  5  Cush.  (Mass.)  483  . 37 

Geisinger  v.  Beyl,  80  Wis.  443 182 

Gelatt  v.  Ridge!  117  Mo.  553 99,  153 

Gordon  v.  Bulkeley,  14  Serg.  &  Rawle  (Pa.),  331 35 

^-Guelich  v.  Nat.  State  Bank,  56  Iowa,  434 195 

Gwilliam  v.  Twist,  1  Q.  B.  D.  557  ;  64  L.  J.  Rep.,  Q.  B.  474 121 

•  Haluptzok  t\  Great  Northern  Ry.,  55  Minn.  446 314 

Hand  v.  Cole,  88  Tenn.  400 3 

Hartlev  &  Minor's  Appeal,  53  Pa.  St.  212 132 

Haskeil  it.  Starbird,  152  Mass.  117 287 

Heath  v.  Nutter,  50  Me.  378 85 

Hegenmyerr.  Marks,  37  Minn.  6 186,280,339 

— -Heinemann  v.  Heard,  50  N.  Y.  27 179 

-Higgins  v.  Moore,  34  N.  Y.  417 215,  226 

Higgins  *.  Senior,  8  Mees.  &  Wels.  834 380 

Hitchcock  v.  Buchanan,  105  U.  S.  416 371 

Howell  v.  Graff.  25  Neb.  130 206 

•Hubbard  v.  Tenbrook,  124  Pa.  St.  291 233  ' 

*  Humble  r.  Hunter,  12  Q.  B.  Rep.  310 262 

—  Hunt  v.  Rousmanier,  8  Wheat.  (U.  S)  174 146 

-  Huntington  v.  Knox,  7  Cush.  (Mass.)  371 253,  326 

-Huntlev  v.  Mathias,  90  N.  C.  101 203,  282 

Hvatt  v.  Clark,  118  N.  Y.  563 52 


TABLE  OF  CASES   REPORTED.  XV 

Page 

Irvine  v.  Watson,  L.  R.  5  Q.  B.  D.  414 237 

Isham  v.  Post,  141  N.  Y.  100 200 

Johnson  v.  Dodge,  17  111.  433 32 

Johnson  e.  Hurley,  115  Mo.  513 105,  206 

Jones  v.  Avery,  50  Mich.  326 8 

Kayton  v.  Barnett,  116  N.  Y.  625 232 

Kaulback  v.  Churchill,  59  N.  H.  296 359 

Keenan  v.  South  worth,  110  Mass.  474 319 

Kelley  v.  Newburyport  Horse  R.  R.  Co.,  141  Mass.  496 70 

Kelly  v.  Thuey,  102  Mo.  522 356,  3S8 

Kiugsley  v.  Davis,  104  Mass.  178 247 

Kozel  v.  Dearlove,  144  111.  23 87 

Kroeger  v.  Pitcairn,  101  Pa.  St.  311 347 

La  Farge  v.  Kneeland,  4  Cow.  (N.  Y.)  456 385 

Laing  v.  Butler,  37  Hun  (N.  Y.  S.  C),  144 245 

•  Long  v.  Thayer,  150  U.  S.  520 141,  384 

Lyon  v.  Kent,  45  Ala.  656 30 

McArthur  v.  Times  Printing  Co.,  48  Minn.  319       42 

>McCauley  v.  Brown,  2  Daly  (N.  Y.  C.  P.),  426 329 

McClintock  v.  Oil  Co.,  146  Pa.  St.  144 78 

M'Cord  v.  Western  Union  Tel.  Co.,  39  Minn.  181 306 

McCormick  v.  Joseph,  83  Ala.  401 279 

McCrary  v.  Ruddick,  33  Iowa,  521 151 

Mclntyrer.  Park,  11  Gray  (Mass.),  102 86 

-Mayor,  &c,  of  Salford  v.  Lever,  1891,  1  Q.  B.  168 334 

Mechanics'  Bk.  v.  Bank  of  Columbia,  5  Wheat.  (U.  S.)  326 369 

-Merchants'  Bank  v.  State  Bank,  10  Wall.  (U.  S. )  604 228 

Milford  Borough  v.  Milford  Water  Co.,  124  Pa.  St.  610 88 

Montague  v.  Forwood,  1893,  2  Q.  B.  D.  351 257 

Montross  v.  Eddy,  94  Mich.  100 167 

-Moore  v.  Appleton.  26  Ala.  633 170 

Morse  v.  State,  6  Conn.  9 313 

"Moulton  v.  Bowker,  115  Mass.  36 227 

Noeckerr.  People,  91  111.  494 313 

Northumberland  Ave.  Hotel  Co.,  In  Re,  L.  R.  33  Ch.  D.  16 39 

-Patterson  v.  Lippincott,  47  N.  J.  L.  457 21,  352 

Philadelphia,  W.  &  B.  R.  Co.  v.  Cowell,  28  Pa.  St.  329 57 

Philpot  v.  Bingham,  55  Ala.  435 18,  84 

•Pickering  v.  Busk,  15  East,  38 223,  330 

-Powers  v.  First  Nat.  Bank,  6  Mont.  251 192 

Rendell  v.  Harriman,  75  Me.  497 253,  300 

Riehl  v.  Evansville  Foundry  Ass'n,  104  Ind.  70 188,  344 


XVI  TABLE  OF  CASES  REPORTED. 

Pago 

Roland  r.  Coleman  &  Co.,  76  Ga.  652 144 

Kowe  r.  Rand,  111  Ind.  206 126,388 

/•kShort  r.  Millard,  68  111.  292 130,166 

—Singer  Mfg.  Co.  v.  Rahn,  132  U.  S.  518    . 9,  282 

Soubegan  Nat.  Bk.  v.  Boardman,  46  Minn.  293 377 

State  v.  McCance,  110  Mo.  398 313 

Stevenson  c.  Mortimer,  Cowp.  805 326,  388 

Stewart  v.  Stone,  127  N.  Y.  500 141,  n 

Strasser  v.  Conklin,  54  Wis.  102 47 

Sutherland  v.  Wyer,  67  Me.  64 158 

Swim  v.  Wilson,*90  Cal.  126 399 

Talmage  t.  Bierhause,  103  Ind.  270 221 

Terre  Haute  &  I.  R.  Co.  v.  MeMurray,  98  Ind.  358 Ill 

Terry  v.  Birmingham  Nat.  Bk.,  99  Ala.  566 168 

Thompson  r.  Barnum,  49  Iowa,  392 328 

Timberlake  c.  Thayer,  71  Miss.  279 160 

Trustees,  &c  ,  of  Easthampton  v.  Bowman,  136  N.  Y.  521 66 

Turner  t>.  Goldsmith,  1891,  1  Q.  B.  544 137 

Vicksburg,  &c.  R.  ».  O'Brien,  119  U.  S.  99 270 

Walter  v.  James,  L.  R.  6  Ex.  124 73 

Watteau  v.  Fen  wick,  1893,  1  Q.  B.  346 235 

Weber  v.  Weber,  47  Mich.  569 397 

Wellington  v.  Jackson,  121  Mass.  157 93 

Western  Pub.  House  e.  Dist.  Tp.  of  Rock,  84  Iowa,  101 45 

Wheeler  &  Wilson  Mfg.  Co.  v.  Aughey,  144  Pa.  St.  398 50,  289 

White  v.  Miller,  71  N.  Y.  118 265 

Whitney  r.  Merchants'  Express  Co.,  104  Mass.  152 177 

Willcox  v.  Arnold,  162  Mass.  577 29 

Williamson  v.  Cambridge  R.  Co.,  144  Mass.  148 268 

Wilson  v.  Dame,  58  N.  H.  392 153 

Wilson  v.  Smales,  1892,  1  Q.  B.  456 384 

Winchester  v.  Howard,  97  Mass.  303 260 

Woolfe  v.  Home,  L.  R  2  Q.  B.  D.  355 227,  383 

Workman  v.  Wright,  33  Oh.  St.  405 90 

Wright  v.  Boynton,  37  N.  H.  9 190 

Yordy  r.  Marshall  County,  86  Iowa,  340 270 


CASES    ON   AGENCY. 


INTRODUCTION. 


CHAPTER  I. 

PRELIMINARY  TOPICS. 

1.     Distinction  between  agent  and  servant. 

§§  4-6.]  FLESH   9.   LINDSAY. 

115  Missouri,  1.— 1893. 

Action  against  Jane  Lindsay  and  her  husband  for  damages 
caused  to  plaintiffs'  building  by  the  negligence  of  Jane 
Lindsay  in  the  repair  of  her  adjoining  building,  whereby  a 
party  wall  collapsed  and  fell.  The  court  instructed  the  jury 
that  if  they  found  that  F.  &  Co.  were  the  agents  of  Jane 
Lindsay  for  the  purpose  of  causing  alterations  in  her  build- 
ing, then  their  act  is  her  act,  and  she  is  responsible  for  the 
alterations  and  changes,  without  the  intervention  of  an  agent. 
Verdict  and  judgment  for  plaintiffs  against  Jane  Lindsay. 

Burgess,  J.  .  .  .  It  is  also  contended  by  defendant 
that  a  married  woman  can  have  no  agent  unless  she  is  pos- 
sessed of  a  separate  estate,  and  such  seems  to  be  the  law  as 
announced  in  the  case  of  Wilcox  v.  Todd,  64  Mo.  390 ; 
Hall  v.  CaMahan,  66  Mo.  316  ;  Hord  v.  Taubman,  79  Mo. 
101 ;  Henry  v.  Sneed,  99  Mo.  407.  But  may  she  not  have 
a  servant  to  repair  her  property  and  preserve  it  from  decay 
and  destruction  ?  An  agent  is  defined  to  be  a  person  duly 
authorized  to  act  on  behalf  of  another,  or  one  whose  un- 
authorized act    has  been  duly  ratified.     1   American  and 

1 


2  INTRODUCTION.  [CH.  L 

English  Encyclopedia  of  Law,  p.  333 ;  Evans  on  Agency 
[Ewell's  Ed.J  sec.  1  ;  1  Sweet's  Law  Dictionary.  Servant  is 
defined  by  Mr.  Webster  as  follows:  "One  who  serves  or 
does  service  voluntarily  or  involuntarily ;  a  person  who  is 
employed  b}-  another  for  menial  offices  or  for  other  labor, 
and  is  subject  to  his  command ;  a  person  who  labors  or 
exerts  himself  for  the  benefit  of  another,  his  master  or  em- 
ployer ;  a  subordinate  helper."  We  take  it  then  that  the 
persons  engaged  in  or  about  the  repairing,  changing,  and  re- 
modelling the  building  of  Mrs.  Lindsay  were  her  servants, 
even  if  she  could  not  have  an  agent  in  regard  to  her  fee- 
simple  property. 

Section  6868,  Revised  Statutes,  1889,  supra,  provides, 
that  the  annual  products  of  the  wife's  realty  may  be  attached 
or  levied  upon,  for  any  debt  or  liability  created  .  .  .  for  the 
cultivation  and  impi-ovement  of  such  real  estate.  By  this  it 
is  clearly  implied  that  the  wife's  realty  ma}'  be  improved,  and 
who  is  to  do  it  if  she  does  not?  The  very  fact  that  she  ja 
permitted  by  law  to  hold  property  in  fee,  implies  that  she 
may  improve,  repair  and  remodel  it  as  the  exigencies  of  the 
case  and  the  advance  of  the  times  may  require,  and  that  for 
that  purpose  she  may  employ  servants,  for  whose  careless- 
ness and  negligence  in  the  manner  of  its  doing  she  and  her 
husband  should  be  held  jointly  liable.  As  was  said  in  the  case 
of  Merrill  v.  St.  Louis,  83  Mo.  244,  '  •  The  law  imposes  upon 
every  owner  of  property  the  duty  of  so  using  it  as  not  to 
injure  the  propert}-  or  the  persons  of  others."  Should  a  mar- 
ried woman  who  owns  property  worth  thousands  of  dollars, 
and  who  may  have  an  impecunious  and  insolvent  husband, 
be  permitted  to  so  use  her  property  as  to  destro}*  that  of 
others,  and  there  be  no  redress  therefor?  If  she  is  not  in 
such  case  answerable  for  negligence  to  any  one  who  has  been 
injured  b}r  its  improper  management,  who  is  so  answerable? 
A  vast  amount  of  property  is  now  held  by  married  women  in 
this  State,  as  it  is  held  in  the  case  at  bar,  and  the  polic}-  of 
the  law  is  that  those  who  thus  own  it  beneficially  should 
answer  for  the  tortious  or  negligent  management  of  it. 


§§  4-6.]  HAND  V.   COLE.  3 

We  hold  that  both  at  common-law  and  under  the  statute 
the  defendant  and  her  husband  are  jointly  liable  for  the 
damages  which  accrued  to  plaintiffs  in  this  case  by  reason 
of  the  carelessness  and  negligence  of  defendant's  servants 
(if  such  was  the  case)  in  remodelling  and  changing  the 
building. 

As  Mrs.  Lindsay  could  have  no  agent  in  regard  to  her 
property  as  held  by  this  court,  the  court  committed  error  in 
instructing  the  jury  that  "  If  Farrar  &  Co.,  or  Charles  Farrar, 
were  the  agents  of  Jane  Lindsay  for  the  purpose  of  causing 
the  alterations  and  changes  in  question  to  be  made,  their  act 
was  her  act,  and  she  is  responsible  for  the  alterations  and 
changes  in  her  said  building  as  if  she  had  made  the  contract 
for  such  alterations  and  changes  in  person,  without  the  inter- 
vention of  an  agent."  .  .  . 

In  no  event  is  Mrs.  Lindsay  alone  to  be  held  liable  for  the 
damages  sued  fofj  bttt  lh»  'c  i;fhlp  jn  conjunction  with  her 
husband. 

For  the  error  of  the  court  in  giving  instructions  for  plaintiff 
as  herein  indicated,  and  in  rendering  judgment  against  Mrs. 
Lindsay  and  not  against  her  husband,  the  cause  will  be  re- 
versed and  remanded  to  be  proceeded  with  in  accordance 
with  the  views  herein  expressed. 

Reversed  and  remanded. 


2.    Construction  of  words  descriptive  of  service  in  statutes. 

§§  4-6.]  HAND  v.   COLE. 

88  Tennessee,  400.— 1890. 

Action  against  stockholders  for  individual  liability  im- 
posed by  statute.  Defence,  that  plaintiff  is  not  within  the 
contemplation  of  the  statute.  Judgment  for  plaintiff.  De- 
fendants appeal. 


4  INTRODUCTION.  [CH.  I. 

Folkes,  J.  This  is  an  action  at  law  to  recover  of  the 
defendants,  individually,  the  wages  claimed  to  be  due  pluin- 
tiff  by  the  Nashville  Plow  Company,  an  insolvent  manufac- 
turing corporation,  chartered  under  Section  11  of  the  General 
Incorporation  Act  of  1875. 

Under  the  case  as  made  in  the  record,  the  only  question 
presented  is,  whether  the  plaintiff,  who  was  a  travelling  sales- 
man or  drummer  in  the  emploj'  of  the  company,  can  claim 
the  benefit  of  said  Act,  as  being  one  of  the  persons  in  favor 
of  whom  the  Legislature  has  given  an  individual  right  of 
recourse  over  upon  the  stockholder. 

Section  11  of  said  Act  provides  for  the  creation  of  mining, 
quarrying,  and  manufacturing  companies,  and  contains  this 
clause :  "  The  stockholders  are  jointly  and  severally  liable, 
individually,  at  all  times,  for  all  moneys  due  and  owing  to 
the  laborers,  servants,  clerks,  and  operatives  of  the  company, 
in  case  the  corporation  becomes  insolvent." 

The  proof  shows  that  for  a  salary  of  $100  per  month,  pay- 
able as  wanted,  the  plaintiff  had  been  on  the  road  for  about 
twenty-three  weeks,  and  at  the  factory  fourteen  or  fifteen 
weeks,  during  the  time  of  his  employment,  being  out  and  in 
alternately,  and  for  varying  periods,  as  directed  and  required 
by  the  company ;  that  while  on  the  road  he  sold  goods  by 
sample  or  photograph,  made  collections,  settled  claims,  and 
generally  did  any  and  every  thing  which  is  understood  to  be 
within  the  duties  of  a  drummer  working  on  a  salar}',  subject 
to  the  direction  and  control  of  the  general  manager  of  the 
company.  When  not  on  the  road  he  worked  in  the  stock, 
shipping  and  receiving  goods,  moving  and  handling  stock, 
etc.  He  also  made  sales  in  the  city  and  collected  bills,  when 
so  instructed.  There  is  due  him  salary  for  five  and  four- 
fifths  months,  during  which  time  he  was  on  the  road  and  at 
the  factory  about  half  each. 

Does  this  character  of  employment  and  service  bring  him 
within  the  benefit  of  the  clause  of  the  Act  above  quoted  ? 
While  there  is  no  doubt  of  the  power  of  the  Legislature  to 
impose  this  increased  liability  upon  the  stockholder,  where  it 


§§  4-6.]  HAND  V.  COLE.  5 

is  done  in  the  Act  creating  the  corporation,  vetT  being  in 
derogation  of  the  common  law,  sueh  statutesf  so  far  as  con- 
cerns such  liability,  are  to  hft  strictly  construed.  "  The}-  are 
a  wide  departure  from  established  rules,  and  though  founded 
on  considerations  of  public  policy  and  general  convenience, 
are  not  to  be  extended  beyond  the  plain  intent  of  the  words 
of  the  statute,"  as  said  by  Mr.  Cook  in  his  work  on  Stock 
and  Stockholders,  sec.  214. 

Again,  this  author  sa3Ts,  in  speaking  of  the  statutory 
liability  of  stockholders  for  debts  of  the  corporation  due  its 
servants  or  laborers :  "  There  has  been  great  difficulty  in 
determining  what  persons  are  to  be  classed  under  these 
terms,  but  the  courts  are  not  inclined  to  give  a  broad  appli- 
cation to  the  words." 

It  must  also  be  borne  in  mind  that  while  the  Legislature 
has  in  such  Acts  manifested  a  purpose  to  guard  and  protect 
the  wages  of  a  certain  class,  it  does  not  follow  that  the  class 
should  be  extended  by  any  liberality  of  construction  so  as  to 
include  persons  not  named.  The  courts  should  be  slow  to 
enlarge  the  class  by  any  latitudinous  construction,  not  only 
upon  the  considerations  above  stated,  but  for  the  further 
reason  that  the  Legislature  is  not  to  be  presumed  to  place 
unnecessary  burdens  upon  the  corporations  of  its  creation. 
The}'  serve  a  most  valuable  purpose  in  developing  and  build- 
ing up  the  resources  of  the  State.  B}'  means  of  the  aggrega- 
tion of  capital  they  are  able  to  accomplish  great,  and  much 
to  be  desired,  benefits  to  the  public,  which  individual  means 
and  effort  would  be  unable  to  achieve. 

With  these  general  principles  to  direct  us,  we  are  to  ascer- 
tain, as  each  case  arises,  what  employe  is  or  is  not  within  the 
language  of  the  Act.  In  arriving  at  a  satisfactory  conclusion 
we  find  but  little  aid  and  comfort  from  the  adjudged  cases 
from  the  courts  of  other  States,  the  same  language  receiving 
ver}T  different  construction  at  the  hands  of  different  courts 
of  equally  high  authority,  as  a  citation  of  some  of  them 
will  show.  The  following  persons  have  been  held  not  to  fall 
within  the  terms  "servants  or  laborers:"  The  secretary  of 


6  •  INTRODUCTION.  [CH.  I. 

a  manufacturing  company,  37  N.  Y.  640 ;  a  civil  engineer, 
84  Pa.  St.  168;  a  consulting  engineer,  38  Barb.  390;  an 
assistant  engineer,  39  Mich.  47 ;  an  overseer  on  a  planta- 
tion, 84  N.  C.  340 ;  a  bookkeeper  and  general  manager, 
90  N.  Y.  213.  These  cases  seem  to  rest  upon  the  idea  that 
the  terms  named  have  reference  only  to  persons  who  perform 
menial  or  manual  labor,  or,  rather,  to  persons  whose  chief 
employment  is  to  perform  such  labor,  and  not  to  embrace 
the  higher  class  named  in  the  authorities  just  cited,  although 
each  of  the  persons  named  did  perform  more  or  less  of 
manual  labor  as  incident  to  their  employment. 

On  the  other  hand,  a  master  mechanic  or  machinist  em- 
ployed by  the  year  was  held  to  be  embraced  under  a  statute 
protecting  "  clerks,  servants,  or  laborers,"  67  Wis.  590. 

But,  without  further  naming  the  cases,  we  refer  the  curious 
to  note  1,  sec.  215,  Cook  on  Stock,  where  a  number  of  cases 
are  to  be  found. 

The  statute  under  consideration,  as  we  have  seen,  uses  the 
words  "  laborers,  servants,  clerks,  and  operatives."  We  do 
not  deem  it  necessary  to  define  the  terms  "laborer"  or 
"  operative,"  as  it  ma}r  be  said  to  be  clear,  under  the  prin- 
ciples of  construction  that  are  to  govern  us,  that  they  do  not 
include  the  travelling  salesman  on  a  salarjr  of  $100  per 
month.  Whether  he  would  be  embraced  under  the  term 
"  servants  "  it  would  be  difficult  to  say.  He  would  be,  if  we 
were  at  liberty  to  accept  the  term  in  its  broadest  sense,  as 
defined  by  Mr.  Wood  in  his  work  on  Master  and  Servant, 
viz. :  "The  word  servant,  in  our  legal  nomenclature,  has  a 
broad  significance  and  embraces  all  persons,  of  whatever 
rank  or  position,  who  are  in  the  employ  and  subject  to  the 
direction  and  control  of  another  in  an}r  department  of  labor 
or  business.  Indeed,  it  may  in  most  cases  be  said  to  be 
synonymous  with  employe."  That  it  is,  however,  not  used 
in  that  sense  in  the  statute  is  shown  by  the  fact  that  other 
terms  are  used  which  would  be  altogether  unnecessary  and 
idle  if  it  were  meant  to  be  synonymous  with  employe.  We 
would  have  no  room  for  the  words  "  laborers,"  "  clerks,"  or 
"  operatives." 


§§  4-6.]  HAND   V.   COLE.  7 

We  are  Of  opinion,  and  so  decjd.fr  ftaj  tlift  plaintiff  ia 
embraced  within  the  term  "  clerk "  as  used  in  the  statute. 
Webster  defines  clerk  as,  "  An  assistant  in  a  shop  or  store, 
who  sells  goods  or  keeps  accounts."  Bouvier  says  he  is,  "A 
person  in  the  employ  of  a  merchant,  who  attends  to  only 
part  of  his  business,  while  the  merchant  himself  superin- 
tends the  whole ;  or,  a  person  employed  in  an  office  to  keep 
accounts  or  records."  Rapalje  sa3*s,  in  Business  Law  :  "  An 
assistant,  employed  to  aid  in  any  business,  mercantile  or 
otherwise,  subject  to  the  advice  and  direction  of  his  em- 
ployer." 

That  "clerk"  embraces  and  includes  "  salesman  "  seems 
beyond  all  doubt.  If  the  term  includes  the  salesman  who 
remains  in  the  shop  or  store,  we  can  see  no  reason  why  it 
does  not  include  the  salesman  on  the  road,  under  like  terms 
of  employment.  Each  makes  sales,  collects  accounts,  handles 
goods,  and  acts  under  the  instructions  of  the  employer. 

It  is  worthy  of  note  that  the  Act  of  1875,  ch.  142,  "To 
provide  for  the  organization  of  corporations,"  creates  an 
individual  liability  upon  the  stockholder  to  employes  in  dif- 
ferent companies  in  different  language,  and  some  of  the  cor- 
porations created  are  left  without  any  provision  at  all  on  the 
subject.  Thus,  "  cotton  compress  and  warehouse,"  Section  1 2, 
has  same  provision  as  we  have  been  considering  for  mining 
and  manufacturing,  viz.,  "  laborers,  servants,  clerks,  and 
operatives  ;  "  Section  18,  as  to  hotel  companies,  the  terms  are 
"laborers,  servants,  and  clerks;"  Section  21,  as  to  printing 
and  publishing  companies,  the  language  is,  "journeyman  for 
wages  due,  and  all  other  servants  and  employes ;  "  Section 
22,  as  to  transfer  and  omnibus  companies,  "  to  servants  and 
agents ;  "  Section  24,  as  to  steamboat  and  packet  companies, 
"  to  hands  and  other  employes ;  "  while  there  is  no  provi- 
sion at  all  on  the  subject  as  to  railway,  turnpike,  telegraph, 
cemetery,  insurance,  street  railway,  building  associations, 
pawnbroker,  levee,  banks,  nor  immigration  and  real  estate 
companies. 

Whatever  may  have  been  the  purpose  of  the  Legislature  in 


8  INTRODUCTION.  [CH.  I. 

making  these  distinctions,  they  do  not  materially  help  us  to 
a  decision  of  the  case  in  hand,  and  we  have  referred  to  it 
merely  as  a  matter  of  interest  in  connection  with  the  sub- 
ject of  statutory  liability  of  stockholders  so  far  as  concerns 
employes. 

There  was  no  error  in  the  action  of  the  circuit  judge,  and 
his  judgment  in  favor  of  the  plaintiff  for  the  full  amount  of 
the  wages  or  salary  shown  to  be  due  by  the  corporation,  will 
be  affirmed  against  the  stockholders  sued  herein,  with  interest 
and  costs. 


§§4-6.]  JONES  v.   AVERY. 

50  Michigan,  326.  — 1883. 

Assumpsit  against  defendant  as  stockholder  to  recover 
under  a  statute  making  stockholders  personally  liable  "for 
all  labor  performed "  for  corporations.  Judgment  for 
defendant. 

Graves,  C.  J.  The  plaintiff,  claiming  to  be  a  judgment 
creditor  of  the  "  Condensed  Oil  Manufacturing  Company" 
for  services  rendered  to  the  company,  and  that  collection  by 
execution  had  failed,  prosecuted  this  action  against  the  de- 
fendant as  a  stockholder  to  compel  him  to  make  payment. 
The  trial  judge  ordered  a  verdict  against  the  plaintiff.  The 
alleged  judgment  against  the  corporation  was  before  a 
justice,  and  was  given  on  a  confession  made  by  the  president 
and  without  a  showing  of  authority  from  the  directors. 
Whether  this  confession  was  sufficient  to  confer  jurisdiction 
may  be  open  to  some  discussion,  but  the  point  is  now 
waived. 

The  circuit  judge  was  of  opinion  that  the  plaintiff's  debt 
was  not  a  labor  debt  within  the  meaning  of  the  provisions 
on  which  the  plaintiff  relies,  —  Const.,  article  15,  §  7 ; 
Comp.  L.  §  2852  —  and  hence  that  the  defendant  was  not 
liable  for  it. 


§§  4-6.]      SINGER  MANUFACTURING  CO.   V.  RAHN.  9 

We  think  this  view  is  correct.  The  plaintiff's  connection 
with  the  company  and  the  nature  of  his  occupation  were 
fully  explained  by  him  as  a  witness.  He  said  :  "  The  kind 
of  labor  I  rendered  to  the  said  company  was  that  of  travel- 
ling salesman  or  agent,  selling  their  goods.  My  duties  con- 
sisted in  soliciting  orders  for  the  sale  of  the  company's 
goods  from  customers,  who  were  using  those  or  similar 
goods  in  different  towns  through  the  country.  I  carried 
samples  with  me  always ;  I  carried  this  assortment  of 
samples  with  me  to  each  customer  or  man  I  solicited.  I 
was  to  receive  a  salary  or  compensation  at  the  rate  of  $1,000 
per  year ;  that  was  my  agreement." 

From  this  it  seems  evident  to  the  court  that  he  was  not  a 
labor-performer  for  the  corporation  in  the  sense  contemplated 
in  the  provisions  for  holding  stockholders  liable.  He  had  no 
part  in  carrying  on  the  establishment,  nor  in  the  manufacture. 
He  was  a  mere  outside  agent  or  representative  of  the  com- 
pany to  bring  business  to  it,  upon  a  salary.  As  regards 
the  present  question,  his  position  was  nearer  the  position  of 
an  officer  of  the  corporation  than  that  of  a  laborer. 

The  judgment  is  affirmed  with  costs. 


3.    Combination  of  functions  of  agent  and  servant  in  the     Iff 
same  representative. 

§§  4-6.]     SINGER  MANUFACTURING   CO.  v.  RAHN. 
132  United  States,  518.  — 1889. 

Action  for  damages  for  personal  injury.  Verdict  and 
judgment  for  plaintiff.     Writ  of  error  by  defendant. 

The  complaint  alleged  that  the  driver  of  the  wagon  which 
caused  the  injur}r  was  a  servant  of  defendant  company.  De- 
fendant denied  this,  and  on  the  trial  put  in  evidence  the 
contract  between  itself  and  the  driver.  The  terms  of  this 
contract  appear  in  the  opinion. 


10  INTRODUCTION.  [CH.  I. 

Gray,  J.  The  general  rules  that  must  govern  this  case 
are  undisputed,  and  the  only  controversy  is  as  to  their  appli- 
cation to  the  contract  between  the  defendant  company  and 
Corbett,  the  driver,  by  whose  negligence  the  plaintiff  was 
injured. 

A  master  is  Jiable  to  third  persons  injured,  by  negligent 
gets  done  bv  his  servant  in  the  course  of  his  employment, 
although  the  master  did  not,  jatfaaJM  or  Know  of  tfcfl  ser- 
vant's act,  or  npcrWt,,  or  pvfiti  if  he  disapproved  or  forbade  it. 
Philadelphia  &  Beading  Railroad  v.  Derby,  14  How.  (U.  S.) 
468,  486.  And  the  relation  of  master  and  servant  exists 
whenever  the  em  ploy  pr  retains  the  right  to  direct  the  man- 
ner in  whinh  the  business  shall  bft  done,  as  well  as  the  result 
to  be  accomplished,  or.  in  other  wordsT  "  not  only  what 
shall  be  done,  but  how  it  shall  be  done."  Railroad  Co.  v. 
Banning,  15  Wall.  (U.  S.)  649,  656. 

The  contract  between  the  defendant  and  Corbett,  upon  the 
construction  and  effect  of  which  this  case  turns,  is  entitled, 
*'  Canvasser's  Salary  and  Commission  Contract."  The  com- 
pensation to  be  paid  by  the  company  to  Corbett,  for  selling 
its  machines,  consisting  of  "  a  selling  commission  "  on  the 
price  of  machines  sold  by  him,  and  "  a  collecting  commis- 
sion "  on  the  sums  collected  of  the  purchasers,  is  uniformly 
and  repeatedly  spoken  of  as  made  for  his  "  services.."  The 
company  ma}'  discharge  him  by  terminating  the  contract  at 
any  time,  whereas  he  can  terminate  it  onty  upon  ten  days' 
notice.  The  company  is  to  furnish  him  with  a  wagon  ;  and 
the  horse  and  harness  to  be  furnished  by  him  are  "  to  be 
used  exclusively  in  canvassing  for  the  sale  of  said  machines 
and  the  general  prosecution  of  said  business." 

But  what  is  more  significant,  Corbett  "  agrees  to  give  hjs 
exclusive  time  and  best  energies  to  said  business,"  and  is  to 
forfeit  all  his  commissions  under  the  contract,  if,  while  it  is  in 
force,  he  sells  any  machines  other  than  those  furnished  to  hi m 
by  the  company  ;  and  he  "  farther  agrees  to  employ  himself 
under  the  direction  of  the  said  Singer  Manufacturing  Com- 
pany, and  under  such  rules  and  instructions  as  it  or  its 
manager  at  Minneapolis  shall  prescribe." 


§§  4-6.]      SINGER  MANUFACTURING  CO.   V.   RAHN.        11 

In  short,  Corbett,  for  the  commissions  to  be  paid  him, 
agrees  to  give  his  whole  time  and  services  to  the  business  of 
the  company ;  and  the  company  reserves  to  itself  the  right 
of  prescribing  and  regulating  not  only  what  business  he  shall 
do,  but  the  manner  in  which  he  shall  do  it ;  and  might,  if  it 
saw  fit,  instruct  him  what  route  to  take,  or  even  at  what 
speed  to  drive. 

The  provision  of  the  contract,  that  Corbett  shall  not  use 
the  name  of  the  company  in  any  manner  whereby  the  public 
or^any  individual  may  be  led  to  believe  that  it  is  responsible 
for  his  actions,  does  not  and  cannot  affect  its  responsibility 
to  third  persons  injured  b}-  his  negligence  in  the  course  of  his 
employment. 

The  circuit  court  therefore  rjghtly  held_  that  Corbett  was 
the  defendant's  servant,  for  whose  negligence  in  the  course 
of  his  employment,  the  defendant  was  responsible  to  the 
plaintiff.  Railroad  Co.  v.  Harming,  above  cited ;  Linne- 
han  v.  Rollins,  137  Mass.  123  ;  Regina  v.  Turner,  11  Cox 
Crim.  Cas.  551. 

Affirmed. 


PART  I. 

FORMATION  OF  THE  RELATION  OF  PRINCIPAL 
AND  AGENT. 


CHAPTER  II. 

FORMATION  OF  THE  RELATION  BY  AGREEMENT. 

1.     Agreement  by  contract  or  conduct  necessary  to  estab- 
lish agency. 

§  11.      CENTRAL  TRUST  COMPANY  OF  NEW 
YORK   y.    BRIDGES. 

16  United  States  Appeals,  115.  — 1893. 

Bill  in  Equity  for  a  receiver  and  intervening  petitions  to 
determine  the  priority  of  lien  claimants  and  mortgagees. 
Decree  for  lien  claimants. 

The  lien  claimants  contracted  with  one  Eager,  who  had 
taken  a  contract  to  construct  the  railway  against  which  the 
liens  were  filed.  The  trial  court  found  that  the  lien  claimants 
had  no  contract  directly  with  the  railway ;  that  nothing  was 
due  Eager  from  the  railway ;  but  that  Eager  was  the  princi- 
pal stockholder  and  the  company  merelj-  another  name  under 
which  he  did  business,  and  that  therefore  the  lien  claimants 
in  contracting  with  Eager  had  contracted  with  the  railway. 

Taft,  Circuit  Judge  (after  stating  the  facts  and  the 
provisions  of  the  statute  of  Tennessee  relating  to  liens). 
Under  this  law,  the  contractor  must  deal  directly  with  the 
compan3'  to  secure  a  lien  for  his  work  or  material,  or,  if  a 
sub-contractor,  then  he  can  have  no  lien  on  the  railroad  unless 
at  the  time  that  or  after  he  serves  notice  of  his  claims  upon 


§11.]  CENTRAL   TRUST  CO.   V.   BRIDGES.  13 

the  company,  the  company  shall  owe  money  to  his  principa\ 
on  the  contract  which  his  sub-contract  has  helped  to  per- 
form ;  and  his  lien  is  limited  to  the  amount  so  due  and 
owing  to  his  principal.  In  other  words,  the  security  of  the 
sub-contractor  is  the  balance  due  the  principal  contractor 
from  the  company  when  the  company  receives  notice  of  the 
sub-contractor's  claim,  and  after  notice  is  given  the  lien  of 
the  sub-contractor  is  transferred  from  the  balance  due  on  the 
contract  to  the  corpus  of  the  railroad,  pro  tanto.  But  if 
there  is  no  balance  due  at  the  time  of  service  of  the  notice, 
there  can  be  no  lien. 

In  the  consideration  of  the  liens  adjudicated  below,  two 
questions,  therefore,  arise.  First,  did  the  lien  claimant  deal 
directly  with  the  company,  as  principal  contractor?  Second, 
if  the  lien  claimants  were  sub-contractors  under  Eager  as 
principal  contractor,  was  there  any  sum  due  Eager  as  such 
principal  contractor  from  the  Knoxville  Southern  Railroad 
Company  after  the  company  was  notified  by  the  sub-con- 
tractors of  their  intention  to  claim  liens? 

First.  The  theory  upon  which  the  master  and  the  learned 
court  below  held  that  all  the  intervening  petitioners  dealt 
directly  with  the  Knoxville  Southern  Railroad  Company  as 
principal  contractors,  was  that  Eager  was  an  agent  of  the 
railroad  company  in  making  the  contracts.  One  may  be 
liable  for  the  acts  of  another  as  his  agent  on  one  of  two 
grounds :  first,  because  by  his  conduct  or  statements  he  has 
held  the  other  out  as  his  agent ;  or,  second,  because  he  has 
actually  conferred  authority  on  the  other  to  act  as  such.  The 
master  reported  to  the  court  below  that  in  no  case  did  Eager, 
under  or  in  the  name  of  the  Knoxville  Southern  Railroad 
Company,  make  any  contract  with  any  one  doing  work  or 
furnishing  material  for  the  road ;  that  the  men  who  con- 
tracted with  Eager  knew  very  little  of  Eager,  saw  him  only 
occasionally,  made  no  inquiry  into  the  real  relation  of  Eager 
to  the  company,  what  interest  he  had  in  it,  or  how  he 
obtained  money  to  carry  on  the  work. 

In  substance,  the  master  reported  that  the  intervening 


14  AGENCY  BY  AGREEMENT.  [CH.  H. 

petitioners  believed  that  they  were  dealing  with  Eager  as 
principal  contractor.  The  proof  fully  sustains  this  conclu- 
sion. All  the  estimates  introduced  in  evidence  upon  which 
payments  were  made  bear  the  name  of  Eager  as  principal 
contractor,  and  every  circumstance  in  the  case  rebuts  the 
idea  that  the  intervening  petitioners  either  believed  or  had 
reason  to  believe  that  they  were  doing  their  work  for,  or  fur- 
nishing their  material  to,  the  company  instead  of  to  Eager. 
The  most  conclusive  evidence  on  this  point  is  that  nearly 
every  one  of  the  intervening  petitioners  subsequently  brought 
suit  and  recovered  judgment  on  his  claim  in  the  State  court, 
against  Eager  as  principal  contractor  and  against  the  com- 
pany as  garnishee.  It  is  said  that  this  does  not  estop  the 
lienholders  from  showing  that  Eager  was  actually  the  agent 
of  the  company,  because  Eager  and  the  company  had  fraudu- 
lently misled  them  into  thinking  that  there  was  no  such 
relation  of  agency  between  him  and  the  compai:ry.  Conced- 
ing that  no  estoppel  arises  from  the  judgments,  the}'  have 
great  probative  force  in  establishing  that  neither  Eager  nor 
the  company  did  anything  or  said  anything  from  which  the 
petitioners  could  infer  the  existence  of  the  agency.  Indeed, 
the  very  argument  upon  which  the  effect  of  the  judgments  as 
an  estoppel  against  the  present  contention  of  the  petitioners 
that  Eager  was  the  agent  of  the  company  is  sought  to  be 
explained  away,  has  for  its  premise  that  the  petitioners  had 
no  reason  to  suppose  that  Eager  was  anything  but  the  princi- 
pal contractor,  and  were  led  to  believe,  both  by  him  and  the 
compan}r,  that  no  such  agency  existed. 

It  follows  necessarily  that  Eager  was  not  the  agent  of  the 
company  in  contracting  with  the  petitioners  for  the  construc- 
tion of  the  road,  unless  the  company  had  in  fact  conferred 
authority  upon  him  to  act  as  its  agent  in  the  matter.  An 
agency  is  created  —  authority  is  actually  conferred  —  very 
much  as  a  contract  is  made,  i.  e.  bjT  an  agreement  between 
the  principal  and  agent  that  such  a  relation  shall  exist  The 
minds  of  the  parties  must  meet  in  establishing  the  agency. 
The  principal  must  intend  that  the  agent  shall  act  for  him, 


§  11.]  CENTRAL  TRUST  CO.   V.   BRIDGES.  15 

and  the  agent  must  intend  to  accept  the  authority  and  act  on 
it,  and  the  intention  of  the  parties  must  find  expression  either 
in  words  or  conduct  between  them. 

Now,  did  the  relation  in  fact  exist?  There  certainly  was 
a  contract  between  Eager  as  an  individual  and  the  Knoxville 
Southern  Railroad  Company  as  a  corporation,  entered  into 
before  May,  1890,  and  probably  much  earlier,  —  certainly 
before  any  of  the  construction,  lien  claims  for  which  are  here 
involved,  was  contracted  for,  —  in  which  Eager  agreed  to 
construct  the  road  at  a  price  of  $20,000  in  bonds  and  $20,000 
in  stock  per  mile,  and  other  considerations.  It  is  said  that 
this  contract  was  a  sham  and  a  fraud,  dated  back  nearly 
three  years  to  save  the  bondholders  of  the  Marietta  and 
North  Georgia  Railway  Company,  and  to  cheat  the  petitioners 
out  of  their  claims.  The  fact  that  the  contract  was  signed  by 
Arthur  as  vice-president  shows  that  it  must  have  been  exe- 
cuted some  months  after  its  date,  because  the  date  is  August 
20,  1887,  and  Arthur  was  not  elected  vice-president  until 
1888.  Moreover,  it  was  during  1888  that  the  president 
reported  to  the  stockholders  that  the  work  was  progressing 
under  the  North  Georgia  Construction  Company  as  con- 
tractor, instead  of  Eager.  But  the  contract  was  spread  on 
the  minutes  of  the  company  in  May,  1890,  so  that  it  must 
have  been  executed  before  that  time.  The  evidence  of  one 
or  two  witnesses  points  to  its  existence  before  March  or 
April  of  that  year.  All  of  the  work  and  labor  sued  for  below 
was  contracted  for  by  Eager  after  March  and  substantially 
after  May,  1890.  Even  if  the  reduction  of  the  contract  to 
writing  was  delayed  until  1890,  this  by  no  means  shows  that 
there  had  not  been  before  that  time  a  verbal  contract,  the 
terms  of  which  had  been  fully  understood  between  the  parties. 
All  the  circumstances  point  to  the  existence  of  such  a  con- 
tract Eager  was  principal  stockholder  and  president  of  the 
North  Georgia  Construction  Company,  which  was  referred  to 
on  the  company's  minutes  as  contractor  in  1888,  and  Eager 
sa}'s  that  this  company  transferred  its  contract  liabilities  and 
rights  to  him.     This  is  entirely  consistent  with  the  probabili- 


16  AGENCY  BY  AGREEMENT.  [CH.  n. 

ties,  and  there  is  nothing  in  conflict  with  it.  Now,  whether 
the  contract  of  the  compan}'  was  originally  made  with  the 
North  Georgia  Construction  Company  or  with  Eager  is 
immaterial  in  this  discussion,  if  neither  was  the  agent  of  the 
company  but  was  an  independent  contractor.  The  delay  in 
the  execution  of  the  formal  contract  with  Eager  was  doubtless 
due  to  the  fact  that,  in  the  minds  of  the  individuals  whose 
duty  it  was  to  attend  to  it,  the  Marietta  and  North  Georgia 
Railway  Company  and  the  Knoxville  Southern  Railroad 
Company  were  the  same  enterprise,  and  Eager's  contract  with 
the  former  was  supposed  to  cover  his  work  on  the  latter  road, 
just  as  the  bonds  and  mortgage  of  the  former  were  evidently 
supposed  to  be  in  effect  the  bonds  and  mortgage  of  the 
latter.  There  is  not,  however,  anywhere  in  the  proof  a 
single  circumstance  or  statement  that  either  the  company  or 
its  directors  intended,  or  that  Eager  intended,  his  relation  to 
the  company  in  constructing  the  road  to  be  anything  other 
than  what  he  alwaj-s  said  it  was,  and  what  the  petitioners 
understood  it  to  be,  —  that  of  principal  contractor. 

The  proof  is  undisputed  that  Eager  received  the  bonds  at 
the  rate  of  020,000  per  mile  of  completed  road  from  the  trust 
compan}7,  as  contractor,  and  that  he  sold  them  as  contractor, 
and  this  during  the  years  from  1887  to  1890.  He  never 
accounted  to  either  railroad  company  for  the  proceeds  of  the 
bonds.  Neither  company  ever  demanded  such  an  account 
from  him.  He  took  them  as  his  propert}',  —  as  his  compen- 
sation under  a  contract  for  work  done.  Such  conduct  is  not 
to  be  reconciled  with  his  being  an  agent  either  in  the  work 
or  in  the  negotiation  of  bonds. 

We  are  clearly  of  the  opinion,  therefore,  that  the  contract 
of  August,  1887,  whenever  executed,  correctly  represents 
Eager's  actual  relation  to  the  company  in  constructing  its 
road.  The  contract  was  one  out  of  which  Eager  hoped  to 
make  profit  for  himself.  .  .  . 

The  reasoning  by  which  the  master,  and  presumably  the 
court  below,  reached  the  conclusion  that  Eager  was  the 
agent  of  the  company,  may  be  seen  from  the  following 
passage  in  his  report:  — 


§  11.]  CENTRAL  TRUST  CO.   V.  BRIDGES.  17 

"Above  it  was  said  that  the  Knoxville  Southern  Railroad 
Company  had  only  a  formal  existence,  because  of  Eager's 
ownership  and  control  and  direction  of  all  its  affairs  and  its 
officers  and  agents.  This  is  true ;  but  still  in  trying  to 
discover  and  enforce  the  rights  of  the  parties  who  may  have 
dealt  with  said  company  and  with  Eager,  it  is  impossible 
to  ignore  the  legal  existence  of  said  compan}'.  Eager's 
omnipotence  was  exercised  through  formal  legal  methods, 
and  his  power  was  derived  from  and  based  upon  the  large 
stock  he  held  in  the  company,  which  he  received  as  part  pay 
for  the  building  of  the  road.  But  this  interest  of  Eager  in 
the  road,  and  his  control  of  the  company  and  all  its  officers 
and  agents,  made  him  its  general  agent,  —  its  plenipoten- 
tiary ;  and  whatsoever  he  did  in  the  building  of  the  road, 
whatever  contracts  he  made,  or  were  made  by  agents  of  his, 
for  material  or  work,  for  and  upon  said  road,  must  be 
regarded  as  acts  and  contracts  of  the  company  itself,  and 
binding  upon  it.  He  could  not,  by  hiding  his  true  relation 
to  the  company,  shield  the  company  from  liabilit}-  to  those 
he  dealt  with  ;  as  soon  as  the  facts  were  known  that  liability 
might  be  asserted." 

We  are  wholly  unable  to  concur  with  the  foregoing. 
Whether  Eager  hid  his  true  relation  to  the  company  de- 
pends on  whether  he  was  its  contractor  or  its  agent.  He 
said  he  was  its  contractor,  and  nothing  stated  by  the  master 
shows  otherwise.  The  corporation  was  a  legal  entity  dif- 
ferent from  Eager,  having  its  existence  under  the  statutes  of 
Tennessee,  and  governed  by  its  directors  in  accordance  with 
the  law  of  its  creation.  Its  directors  made  a  contract  with 
Eager.  Thej"  intended  that  to  be  a  binding  contract  on  the 
company.  Eager  intended  it  to  be.  The  company  through 
its  legal  and  authorized  governors  and  agents,  therefore, 
made  a  contract  with   Eager, 

There  is  no  law  which  makes  it  impossible  for  a  majorit}* 
stockholder  to  enter  into  a  contract  with  his  company. 
Wright  v.  Kentucky  &  Great  Eastern  Railway  Company, 
117  U.  S.  72,  95. 

As  already  explained,  the  company  may  appeal  to  a  court 
of  equity  to  set  such  contract  aside,  if  it  is  unfair  or  uncon- 
scionable, for  fraud  or  undue  influence,  but  until  this  is  done 

2 


18  AGENCY  BY  AGKEEMENT.  [CH.  H. 

the  contract  expresses  the  true  relation  between  the  parties. 
The  fact  that  a  man  has  controlling  influence  with  another 
does  not  make  him  that  other's  agent,  unless  the  other 
intends  such  relation  to  exist,  or  so  acts  as  to  lead  third 
persons  to  believe  that  it  exists.  What  is  true  between 
individuals  is  true  between  an  individual  and  a  corporation. 
In  the  case  at  bar,  the  master  fully  admits  that  there  was  no 
holding  out  of  agency  in  Eager  by  the  company.  His  finding 
that  an  agencj'  in  fact  existed  rests  simply  on  the  influence 
which  Eager  had  over  the  company,  and  not  in  any  intention 
of  either  that  Eager  should  act  as  its  agent  in  the  construe- 
tion  of  the  road,  and  his  conclusion  is  reached  in  the  face  of 
the  fact,  which  he  fully  admits,  that  they  both  intended 
Eager  to  be  an  independent  contractor.  The  master's 
conclusion  cannot  be  supported.1 

(The  court  then  decides  that  on  the  second  question, 
whether  anything  was  owing  Eager  from  the  company,  the 
case  must  go  back  for  a  rehearing.) 

Decree  reversed. 


2.  Consideration  necessary  as  between  principal  and  agent. 

§13.]  ALLEN  v.  BRYSON. 

67  Iowa,  591.— 1885. 
[Reported  herein  at  p.  154.] 

3.  Competency  of  parties. 

a.  Infant  principals. 

§15.]  PHILPOT  v.  BINGHAM. 

55  Alabama,  435.  — 1876. 

Action  to  recover  an  undivided  half   interest  in  land. 
Judgment  for  defendant. 

1  On  this  point  of  "  one-man  companies,"  see  Broderip  v.  Salomon, 
1895,  2  Ch.  323. 


§  15."]  PHILPOT  V.   BINGHAM.  19 

Plaintiff,  a  minor,  and  his  older  brother,  executed  a  power 
of  attorney  to  their  father,  authorizing  him  to  sell  and  convey 
the  land  in  controversy.  Under  this  power  the  land  was  con- 
veyed to  one  Stringfellow,  who  convejed  to  defendant.  De- 
fendant was  ignorant  of  plaintiff's  infancy.  The  trial  court 
charged  that  the  power  of  attorney  and  the  deed  executed 
under  it  were  voidable  and  not  void. 

Stone,  J.  Ever  since  the  leading  case  of  Zouch  v.  Par- 
sons, 3  Burr.  1794,  there  has  been  a  growing  disposition  to 
treat  almost  all  contracts  made  by  infants  as  voidable  rather 
than  void.  The  principles  of  that  decision  have  received  a 
very  steady  and  cheerful  support  on  this  side  of  the  Atlantic. 
The  declared  rule  is,  that  contracts  of  an  infant,  caused  by 
his  necessities,  or  manifestly  for  his  advantage,  are  valid  and 
binding,  while  those  manifestly  to  his  hurt  are  void.  Con- 
tracts falling  between  these  classes  are  voidable.  Relaxation 
of  ancient  rigor  has  had  the  effect  of  placing  many  transac- 
tions, formerly  adjudged  void,  in  the  more  conservative 
category  of  voidable.  See  3  Washb.  Real  Prop.  559  et  seq. ; 
2  Kent's  Com.  234,  in  margin;  1  Amer.  Leading  Cases, 
5th  ed.  242  et  seq.,  in  margin  ;  2  Greenl.  Ev.  §  365  et  seq. ; 
Tyler  on  Infancy,  41 ;  Tucker  v.  Moreland,  10  Pet.  58,  65  ; 
Boody  v.  McKenney,  (10  Shep.)  23  Maine,  517.  This 
question  has  been  several  times  before  this  court,  and  we 
have  uniformly  followed  the  modern  rule  above  expressed. 
Fant  v.  Cathcart,  8  Ala.  725 ;  Elliott  v.  Horn,  10  Ala. 
348  ;  Thomasson  v.  Boyd,  13  Ala.  419  ;  West  v.  Penny,  16 
Ala.  186  ;  Weaver  v.  Jones,  24  Ala.  420  ;  Manning  v.  John- 
son, 26  Ala.  446 ;  Freeman  v.  Bradford,  5  Por.  270 ; 
Slaughter  v.  Cunningham,  24  Ala.  260 ;  Derrick  v.  Ken- 
nedy, 4  Por.  41 ;   Clark  v.  Goddard,  39  Ala.  164. 

It  is  declared  in  the  adjudged  cases,  and  in  the  elemen- 
tary books,  that  a  power  of  attorney  to  sell  lands,  a  warrant 
of  attorney,  or  any  other  creation  of  an  attorney,  by  an  in- 
fant, is  absolutely  void.  Lawrence  v.  McArter,  10  Ohio, 
38,  42 ;  Pyle  v.  Cravens,  4  Littell,  17,  21  ;  Bennett  v. 
Davis,  6  Cow.  393  ;    Fonda  v.  Van  Home,  15  Wend.  631  ,• 


20  AGENCY  BY  AGREEMENT.  [CH.  II. 

Knox  v.  Flack,  22  Penn.  337;  Tyler  on  Infancy,  46-47; 

1  Ainer.  Leading  Cases,  5th  ed.  247,  in  margin  ;  Saunderson 
v.  Marr,  1  H.  Bla.  75  ;   Tucker  v.  Moreland,  10  Pet.  58,  68  ; 

2  Kent's  Com.,  n.  p.  235.  So,  in  Alabama,  it  has  been  said, 
"  an  infant  cannot  appoint  an  agent."  Ware  v.  Cartledge, 
24  Ala.  622.  In  Weaver  v.  Jones,  24  Ala.  420,  C.  J. 
Chilton  said,  "The  better  opinion,  as  maintained  by  the 
modern  decisions,  is,  that  an  infant's  contracts  are  none  of 
them  (with,  perhaps,  one  exception)  absolutely  void  by  reason 
of  non-age ;  that  is  to  sa}-,  the  infant  may  ratify  them,  after 
he  arrives  at  the  age  of  legal  majoritj'."  C.  J.  Chilton  re- 
fers to  Parsons  on  Contracts  in  support  of  this  proposition. 
Looking  into  that  work,  *244,  it  is  clear  that  he  means  to 
except  from  the  operation  of  the  general  rule,  laid  down  by 
him,  those  contracts  of  an  infant  by  which  he  attempts  to 
create  an  attorne}'  or  agencj-. 

From  such  an  array  of  authorities,  sanctioned  as  the  prin- 
ciple has  been  by  this  court,  we  do  not  feel  at  liberty  to 
depart,  although  the  argument  in  favor  of  the  exception  is 
rather  specious  than  solid.  We  therefore  hold,  that  the 
i power  of  attorney,  under  which  the  plaintiffs  land  was  sold, 
.made,  as  it  appears  to  have  been,  while  he  was  an  infant, 
was  and  is  what  the  law  denominates  void.  If  void,  then 
no  title,  even  inchoate,  passed  thereby ;  and  the  defence  to 
the  action  must  rest  entirely  on  grounds  other  than  and  inde- 
pendent of  the  power  of  attorney  and  deed.  Thus  circum- 
scribed, the  defendant  (appellee  here)  has  failed  to  show  any 
defence  to  the  plaintiff's  claim  to  an  undivided  half  interest 
in  the  land  sued  for.  See  Boody  v.  McKenney,  23  Maine, 
517 ;  Hovey  v.  Hobson,  53  Maine,  451 ;  Cresinger  v.  Welch, 
15  Ohio,  156. 

(The  court  then  decides  that  defendant  is  holding  ad- 
versely to  plaintiff's  interest) 

Judgment  reversed. 


§  15.]  PATTEKSON  V.   LIPPINCOTT.  21 

§  15.]  PATTERSON  v.   LIPPINCOTT. 

47  New  Jersey  Law,  457. — 1885. 

Action  of  debt  Judgment  of  non-suit  against  plaintiff. 
Defendant  appeals.     The  opinion  states  the  facts. 

Scudder,  J.  An  action  of  debt  was  brought  in  the  court 
for  the  trial  of  small  causes  by  Jacob  M.  Patterson  against 
Barclay  Lippincott,  to  recover  the  balance,  $75,  claimed 
under  a  contract  in  writing  for  the  sale  of  the  exclusive  right 
to  use,  manufacture  and  sell  the  plaintiffs  patent  "  air- 
heating  attachment,"  in  Atlantic  Count}-,  New  Jersey.  The 
writing  was  signed  "  Geo.  P.  Lippincott,  per  Barclay 
Lippincott,"  on  the  part  of  the  purchaser.  The  state  of 
demand  avers  that  by  virtue  of  this  agreement  the  plaintiff 
did  in  due  form  convey  said  patent  right  to  said  George  P. 
Lippincott,  that  said  George  and  Barclay,  on  request,  have 
refused  to  pay  said  balance,  and  that,  since  pa}-ment  be- 
came due,  the  plaintiff  has  found  out  and  charges  that  said 
George  is  under  the  age  of  twentj-one  jears.  He  further 
avei-s  that  he  never  had  any  contract  or  negotiations  with 
George,  and  that  Barclaj-'s  warrant}*  of  authority  to  act  for 
his  minor  son  is  broken,  whereby  an  action  has  accrued  to 
the  plaintiff  against  the  defendant. 

The  averment  that  the  plaintiff  never  had  any  contract  or 
negotiations  with  George,  is  not  sustained  by  the  proof,  for 
the  testimony  of  Joseph  N.  Risley,  the  agent  who  made  the 
sale,  which  is  the  onty  evidence  on  this  point  that  appears  in 
the  case,  is,  that  the  defendant  told  him  he  was  going  out  of 
business  and  intended  to  transfer  it  to  George ;  requested 
him  to  see  George ;  he  did  so,  talked  with  him ;  he  looked 
at  the  patent;  was  satisfied  with  it,  and  talked  with  his 
father  about  buying  it.  The  deed  for  the  patent-right  in 
Atlantic  County  was  drawn  to  George  P.  Lippincott.  It  is 
proved  by  the  admission  of  the  defendant,  Barclaj*  Lippincott, 
that  at  the  time  of  such  sale  and  transfer  his  son  George  was 


22  AGENCY  BY  AGREEMENT.  [CH.  tt. 

a  minor.  This  admission  is  competent  testimony  in  this  suit 
against  him. 

A  verdict  of  the  jury  was  given  for  the  plaintiff  against  the 
defendant  in  the  court  for  the  trial  of  small  causes  ;  and  on 
the  trial  of  the  appeal  in  the  court  of  common  pleas  there 
was  a  judgment  of  non-suit  against  the  plaintiff.  The 
reason  for  the  non-suit  does  not  appear  on  the  record,  but 
the  counsel  have  argued  the  cause  before  us  on  the  case  pre- 
sented by  the  pleadings  and  proofs,  the  contention  being 
here,  as  it  was  below,  that  the  plaintiff  could  not  aver  and 
show  the  infancy  of  George  P.  Lippincott,  and  bring  this 
action  against  Barclay  Lippincott,  as  principal  in  the 
contract,  in  contradiction  of  its  express  terms. 

On  the  face  of  the  written  agreement  George  P.  Lippincott 
is  the  principal,  and  Barclay  Lippincott  the  agent  The  suit 
on  the  contract  should  therefore  be  against  the  principal 
named,  and  not  against  the  agent,  unless  there  be  some 
legal  cause  shown  to  change  the  responsibilit}'.  The  cause 
assigned  b}r  the  plaintiff  is  the  infancy  of  George  at  the  time 
the  agreement  was  made  in  his  name  by  his  father.  The 
authority  on  which  he  bases  his  right  of  action  is  Bay  v. 
Cook,  2  Zab.  (N.  J.)  343,  which  follows  and  quotes  Mott  v. 
Hicks,  1  Cow.  (N.  Y.)  513,  13  Am.  Dec.  550,  to  the  effect 
that  if  a  person  undertakes  to  contract  as  agent  for  an 
individual  or  corporation,  and  contracts  in  a  manner  which  is 
not  legally  binding  upon  his  principal,  he  is  personally 
responsible ;  and  the  agent,  when  sued  on  such  contract,  can 
exonerate  himself  from  the  personal  responsibility  only  by 
showing  his  authority  to  bind  those  for  whom  he  has  under- 
taken to  act  Bay  v.  Cook  was  an  action  against  an  over- 
seer who  had  employed  a  physician  to  attend  a  sick  pauper, 
without  an  order  for  relief  under  the  provisions  of  the  Act 
concerning  the  poor.  As  his  parol  contract  with  the  physi- 
cian was  entirely  without  authority  to  bind  the  township,  it 
was  said  that  he  had  only  bound  himself  to  pay  for  the 
services  rendered  at  his  request 

Later  cases  have  held  that  an  agent  is  not  directly  liable  on 


§  15.]  PATTEKSON  V.   LTPPINCOTT.  23 

an  instrument  he  executes,  without  authority,  in  another's 
name ;  that  the  remedy  in  such  case  is  not  on  the  contract, 
but  that  he  may  be  sued  either  for  breach  of  warranty  or  for 
deceit,  according  to  the  facts  of  the  case.  Jenkins  v.  Hutch- 
inson, 13  Q.  B.  744 ;  Lewis  v.  Nicholson,  18  Q.  B.  503 ; 
Baltzen  v.  Nicolay,  53  N.  Y.  467 ;  White  v.  Madison,  26 
N.  Y.  117,  and  many  other  cases  collected  in  the  notes  in 
Wharton  on  Agency,  §§  524,  532,  and  notes  to  Thomson 
v.  Davenport,  9  B.  &  C.  78,  in  2  Smith's  Leading  Cases,  377 
(Am.  ed).  Andrews,  J.,  in  Baltzen  v.  Nicolay,  supra,  says : 
"  The  ground  and  form  of  the  agent's  liability  in  such  a  case 
has  been  the  subject  of  discussion,  and  there  are  conflicting 
decisions  upon  the  point ;  but  the  later  and  better-considered 
opinion  seems  to  be,  that  his  liability,  when  the  contract  is 
made  in  the  name  of  bis  principal,  rests  upon  an  implied 
warranty  of  his  authority  to  make  it,  and  that  the  remedy 
is  by  an  action  for  its  breach." 

Although  the  state  of  demand  in  the  present  case  is  uni- 
formly drawn,  there  is  in  the  last  sentence  a  charge  that  the 
defendant's  warranty  of  authorit}',  in  pretending  to  act  for 
said  minor,  is  broken,  whereby  an  action  has  accrued.  This 
alleged  breach  of  an  implied  warranty  is  founded  on  the 
assumption  that  the  son  could  not  confer  any  authority  dur- 
ing his  minority  to  his  father  to  act  for  him  in  the  pur- 
chase of  this  patent-right.  There  are  two  answers  to  this 
position.  The  act  of  an  infant  in  making  such  a  contract  as 
this,  which  may  be  for  his  benefit  in  transacting  business, 
either  directly  or  through  the  agency  of  another,  is  voidable 
only,  and  not  absolutely  void,  and  therefore  there  is  no 
breach  of  the  implied  warranty  unless  there  be  proof  show- 
ing that  the  act  of  the  agent  was  entirely  without  the  infant's 
knowledge  or  consent.  The  mere  fact  of  the  infancy  of  the 
principal  will  not  constitute  such  breach. 

It  was  argued  in  "Whitney  v.  Butch,  14  Mass.  457,  7  Am. 
Dec.  229,  that  a  promissory  note  signed  by  Dutch  for  his 
partner  Green,  who  was  a  minor,  was  void  as  to  Green, 
because  he  was  not  capable  of  communicating  authority  to 


24  AGENCY  BY  AGREEMENT.  [CH.  II. 

Dutch  to  contract  for  him,  and  that  being  void,  it  was  not 
the  subject  of  a  subsequent  ratification.  But  the  court  held 
that  it  was  voidable  only,,  and  having  been  ratified  by  the 
minor  after  he  came  of  age,  it  was  good  against,  him-  See 
Tyler,  Inf.  Ch.  III.  §§  14,  18. 

Another  answer  is  that  the  defence  of  infancy  to  this 
contract  with  the  plaintiff  can  only  be  set  up  by  the  infant 
himself  pr  those  who  legally  represent  him.  Infancy  is  a 
personal  privilege  of  which  no  one  can  take  advantage  but 
hjmself.  Voorhees  v.  Wait,  3  Green  (N.  J.),  343  ;  Tyler, 
Inf.  Ch.  IV.  §  19  ;  Bingham,  Inf.  49. 

In  this  case  the  plaintiff  seeks  to  disaffirm  the  infant's 
contract  with  him,  in  his  own  behalf,  and  sue  a  third  party 
on  the  contract,  whose  authority  to  bind  him  the  infant  has 
not  denied.  The  privilege  of  affirming  or  disaffirming  the 
contract  belongs  to  the  infant  alone,  and  the  plaintiff  cannot 
exercise  it  for  him.  The  mere  refusal  to  pa}r,  charged  in  the 
demand  and  proved,  is  not  a  denial  of  the  defendant's 
authority  to  bind  the  infant ;  for  it  may  be  based  on  the 
failure  of  consideration,  the  invalidity  of  the  patent,  fraudu- 
lent representations,  or  other  causes. 

The  judgment  of  non-suit  entered  in  the  Court  of  Common 
Pleas  will  be  affirmed. 


b.  Insane  principal. 
§  16.]  DREW  v.   NUNN. 

L.  R.  4  Queen's  Bench  Division  (C.  A.),  661.  — 1879. 

Action  to  recover  for  goods  supplied  defendant's  wife 
upon  her  order  while  defendant  was  insane.  Verdict  and 
judgment  for  plaintiff.  Defendant  appeals.  The  opinion 
states  the  facts. 

Brett,  L.  J.  This  appeal  has  stood  over  for  a  long  time, 
principally  on  my  account,  in  order  to  ascertain  whether  it 
can  be  determined  upon  some  clear  principle.    I  have  found, 


§  16.]  drew  v.  miKX.  25 

however,  that  the  law  upon  this  subject  stands  upon  a  very 
unsatisfactory  footing. 

The  action  was  tried  before  Mellor,  J.,  and  was  brought 
to  recover  the  price  of  boots  and  shoes  supplied  by  the 
plaintiff  to  the  defendant's  wife  whilst  the  defendant  was 
insane.  It  is  beyond  dispute  that  the  defendant,  when  sane, 
had  given  his  wife  absolute  authority  to  act  for  him,  and  held 
her  out  to  the  plaintiff  as  clothed  with  that  authoritj'.  After- 
wards the  defendant  became  insane  so  as  to  be  unable  to  act 
upon  his  own  behalf,  and  his  insanity  was  such  as  to  be 
apparent  to  any  one  with  whom  he  might  attempt  to  enter 
into  a  contract.  Whilst  he  was  in  this  state  of  mental 
derangement,  his  wife  ordered  the  goods  from  the  plaintiff, 
who  had  no  notice  of  the  defendant's  insanity,  and  was 
supplied  with  them  by  him.  The  defendant  was  for  some 
time  confined  in  a  lunatic  asylum ;  but  he  afterwards  re- 
covered his  reason,  and  he  has  defended  the  action  upon 
the  ground  that  by  his  insanity  the  authority  which  he  gave 
to  his  wife  was  terminated,  and  that  he  is  not  liable  for  the 
price  of  the  goods  supplied  pursuant  to  her  order.  Mellor, 
J.,  left  no  question  to  the  jury  as  to  the  extent  of  the 
defendant's  insanity,  but  in  effect  directed  them  as  matter 
of  law  that  the  plaintiff  was  entitled  to  recover.  I  think 
it  must  be  taken  that  the  defendant's  insanity  existed  to  the 
extent  which  I  have  indicated. 

Upon  this  state  of  facts,  two  questions  arise.  Does 
insanity  put  an  end  to  the  authority  of  the  agent  ?  One 
would  expect  to  find  that  this  question  had  been  long 
decided  on  clear  principles ;  but  on  looking  into  Story  on 
Agency,  Scotch  authorities,  Pothier,  and  other  French 
authorities,  I  find  that  no  satisfactory  conclusion  has  been 
arrived  at.  If  such  insanit}'  as  existed  here  did  not  put  an 
end  to  the  agent's  authority,  it  would  be  clear  that  the 
plaintiff  is  entitled  to  succeed ;  but  in  mv  opinion  insanity 
of  this  kind  does  put  an  end  to  the  agent's  authority.  It 
cannot  be  disputed  that  some  cases  of  change  of  status  in 
the  principal  put  an  end  to  the  authority  of  the  agentj  thus, 


26  AGENCY  BY  AGREEMENT.  [CH.  H. 

the  bankruptcy  and  death  of  the  principal^  the  marriage  g{ 
a  female  principal,  all  put  an  end  to  the  authority  of  the 
agent.  It  ma}'  be  argued  that  this  result  follows  from  the 
circumstance  that  a  different  principal  is  created.  Upon 
bankruptcy,  the  trustee  becomes  the  principal ;  upon  death, 
the  heir  or  devisee  as  to  realty,  the  executor  or  adminis- 
trator as  to  personalty ;  and  upon  the  marriage  of  a 
female  principal  her  husband  takes  her  place.  And  it  has 
been  argued  that  by  analogy  the  lunatic  continues  liable 
until  a  fresh  principal,  namely,  his  committee,  is  appointed. 
But  I  cannot  think  that  this  is  the  true  ground,  for  execu- 
tors are,  at  least  in  some  instances,  bound  to  cany  out  the 
contracts  entered  into  by  their  testators.  I  think  that  the 
satisfactory  principle  to  be  adopted  is,  that  where  such  a 
change  occurs  as  to  the  principal  that  he  can  no  longer  act 
for  himself,  the  agent  whom  he  has  appointed  can  no  longer 
act  for  him.  In  the  present  case  a  great  change  had  occurred 
in  the  condition  of  the  principal :  he  was  so  far  afflicted  with 
insanity  as  to  be  disabled  fr^m  noting  for  himself  ■  therefore 
his  wife,  who  was  his  agent,  could  nn  longer  flf»t  for  hi™. 
Upon  the  ground  which  I  have  pointed  out,  I  think  that  her 
authority  was  terminated.  It  seems  to  me  that  an  agent  is 
liable  to  be  sued  by  a  third  person,  if  he  assumes  to  act  on 
his  principal's  behalf  after  he  has  knowledge  of  his  principal's 
incompetency  to  act.  In  a  case  of  this  kind  he  is  acting 
wrongfully.  The  defendant's  wife  must  be  taken  to  have 
been  aware  of  her  husband's  lunacy ;  and  if  she  had  assumed 
to  act  on  his  behalf  with  an}'  one  to  whom  he  himself  had  not 
held  her  out  as  his  agent,  she  would  have  been  acting  wrong- 
fully, and,  but  for  the  circumstance  that  she  is  married,  would 
have  been  liable  in  an  action  to  compensate  the  person  with 
whom  she  assumed  to  act  on  her  husband's  behalf.  In  my 
opinion,  if  a  person  who  has  not  been  held  out  as  agent 
assumes  to  act  on  behalf  of  a  lunatic,  the  contract  is  void 
against  the  supposed  principal,  and  the  pretended  agent  is 
liable  to  an  action  for  misleading  an  innocent  person. 

The  second  question  then  arises,  what  is  the  consequence 


§  16.]  DREW  V.   NTJNN.  27 

wjiere  a  principal,,  who  has  held  out  another  as  hjgjiogntj 
subsequently  becomes  insane,  and  a  third  person  deals  with 
the  agent  without  p^fi™  that  the  principal  ja  a  lunatic? 
Authority  may  be  given  to  an  agent  in  two  wa}s.  First,  it 
may  be  given  by  some  instrument,  which  of  itself  asserts 
that  the  authority  is  thereby  created,  such  as  a  power  of 
attornej' ;  it  is  of  itself  an  assertion  by  the  principal  that 
the  agent  may  act  for  him.  Secondly,  an  authority  may  also 
be  created  from  the  principal  holding  out  the  agent  as  entitled 
to  act  generally  for  him.  The  agency  in  the  present  case  was 
created  in  the  manner  last-mentioned.  As  between  the  de- 
fendant and  his  wife,  the  agency  expired  upon  his  becoming 
to  her  knowledge  insane ;  but  it  seems  to  me  that  the  person, 
dealing  with  the  agent  without  knowledge  of  the  principalis 
insanity  has  a  right  to  enter  into  a  contract  with  him,  and 
the  principal,  although  a  lunatic,  is  bound  so  that  he  cannot 
repudiate  the  contract  assumed  to  be  made  upon  his  behalf. 
It  is  difficult  to  assign  the  ground  upon  which  this  doctrine, 
which,  however,  seems  to  me  to  be  the  true  principle,  exists. 
It  is  said  that  the  right  to  hold  the  insane  principal  liable 
depends  upon  contract  I  have  a  difficulty  in  assenting  to 
this.  It  has  been  said  also  that  the  right  depends  upon 
estoppel.  I  cannot  see  that  an  estoppel  is  created.  But  it 
has  been  said  also  that  the  right  depends  upon  representa- 
tions made  by  the  principal  and  entitling  third  persons  to  act 
upon  them,  until  they  hear  that  those  representations  are 
withdrawn.  The  authorities  collected  in  Story  on  Agency, 
ch.  xviii.  §  481,  p.  610  (7th  ed.),  seem  to  base  the  right  upon 
the  ground  of  public  policy :  it  is  there  said  in  effect  that 
the  existence  of  the  right  goes  in  aid  of  public  business. 
It  is,  however,  a  better  way  of  stating  the  rule  to  say  that 
the  holding  out  of  another  person  as  agent  is  a  representation 
upon  which,  at  the  time  when  it  was  made,  third  parties  had 
a  right  to  act,  and  if  no  insanity  had  supervened  would  still 
have  had  a  right  to  act.  In  this  case  the  wife  was  held  out 
as  agent,  and  the  plaintiff  acted  upon  the  defendant's  repre- 
sentation as  to  her  authority  without  notice  that  it  had  been 


28  AGENCY  BY  AGREEMENT.  [CH.  II. 

withdrawn.  The  defendant  cannot  escape  from  the  conse- 
quences of  the  representation  which  he  has  made  :  he  cannot 
withdraw  the  agent's  authority  as  to  third  persons  without 
giving  them  notice  of  the  withdrawal.  The  principal  is 
bound,  although  he  retracts  the  agent's  authority,  if  he  has 
not  given  notice  and  the  latter  wrongfulby  enters  into  a 
contract  upon  his  behalf.  The  defendant  became  insane, 
and  was  unable  to  withdraw  the  authority  which  he  had  con- 
ferred upon  his  wife :  he  may  be  an  innocent  sufferer  by  her 
conduct,  but  the  plaintiff,  who  dealt  with  her  bond  fide,  is  also 
innocent,  and  where  one  of  two  persons  both  innocent  must 
suffer  by  the  wrongful  act  of  a  third  person,  that  person 
making  the  representation  which,  as  between  the  two,  was 
the  original  cause  of  the  misnhief,  must  be  the  sufferer  and 
must  bear  the  loss.  Here  it  does  not  lie  in  the  defendant's 
mouth  to  say  that  the  plaintiff  shall  be  the  sufferer. 

A  difficulty  ma}-  arise  in  the  application  of  a  general 
principle  such  as  this  is.  Suppose  that  a  person  makes  a 
representation  which  after  his  death  is  acted  upon  by  an- 
other in  ignorance  that  his  death  has  happened  :  in  my  view 
the  estate  of  the  deceased  will  be  bound  to  make  good  any 
loss  which  may  have  occurred  through  acting  upon  that 
representation.  It  is,  however,  unnecessary  to  decide  this 
point  to-day. 

Upon  the  grounds  above  stated  I  am  of  opinion  that, 
although  the  authority  of  the  defendant's  wife  was  put  an  end 
to  by  his  insanity,  and  although  she  had  no  authority  to  deal 
with  the  plaintiff,  nevertheless  the  latter  is  entitled  to  recover, 
because  the  defendant,  whilst  he  was  sane,  made  representa- 
tions to  the  plaintiff,  upon  which  he  was  entitled  to  act  until 
he  had  notice  of  the  defendant's  insanity,  and  he  had  no 
notice  of  the  insanity  until  after  he  had  supplied  the  goods 
for  the  price  of  which  he  now  sues.  The  direction  of  Mellor, 
J.,  was  right 

Bramwell,  L.  J.,  also  read  for  affirmance. 

Brett,  L.  J.  I  am  requested  by  Cotton,  L.  J.,  to  state 
that  he  agrees  with  the  conclusion  at  which  we  have  arrived, 


§  20.]  WILLCOX  V.  AUNOLD.  29 

but  that  he  does  not  wish  to  decide  whether  the  authority  of 
the  defendant's  wife  was  terminated,  or  whether  the  liability 
of  a  contractor  lasts  until  a  committee  has  been  appointed. 
He  bases  his  decision  simply  upon  the  ground  that  the 
defendant,  by  holding  out  his  wife  as  agent,  entered  into  a 
contract  with  the  plaintiff  that  she  had  authority  to  act  upon 
his  behalf,  and  that,  until  the  plaintiff  had  notice  that  this 
authority  was  revoked,  he  was  entitled  to  act  upon  the 
defendant's  representations. 

I  wish  to  add  that  if  there  had  been  any  real  question  as  to 
the  extent  of  the  defendant's  insanity,  it  ought  to  have  been 
left  to  the  jury ;  and  that  as  no  question  was  asked  of  the 
jury,  I  must  assume  that  the  defendant  was  insane  to  the 
extent  which  I  have  mentioned.  I  may  remark  that  from  the 
mere  fact  of  mental  derangement  it  ought  not  to  be  assumed 
that  a  person  is  incompetent  to  contract ;  mere  weakness  of 
mind  or  partial  derangement  is  insufficient  to  exempt  a  person 
from  responsibility  upon  the  engagements  into  which  he  has 
entered.  Appeal  dismissed. 


c.    Married  women  as  principals. 

§  17.]  FLESH  v.  LINDSAY. 

115  Missouri,  1.  —  1892. 
[Reported  herein  at  page  1.] 

d.     Unincorporated  societies  as  principals. 

§  20.]       WILLCOX  et  al.  v.  ARNOLD  et  al. 
162  Massachusetts,  577.  — 1895. 

Contract  for  work  done  and  materials  furnished.  Judgment 
for  plaintiffs  against  all  the  defendants  except  Gifford.  De- 
fendants allege  exceptions. 

The  class  of  1893  of  Tufts  College,  at  a  class  meeting  duly 


30  AGENCY  BY  AGREEMENT.  [CH.  H. 

called,  voted  to  publish  a  volume  to  be  entitled, "  The  Brown 
and  Blue,"  and  elected  Arnold  as  business  manager  of  the 
publication,  and  certain  other  of  the  defendants  as  editors. 
Defendant  Arnold  made  a  contract  with  plaintiffs  for  the  print- 
ing of  the  volume,  upon  which  a  balance  remained  unpaid. 
All  the  defendants  except  Gifford  were  present  at  the  class 
meeting  at  which  Arnold  was  elected  business  manager. 

Field,  C.  J.  The  evidence  was  sufficient  to  warrant  the 
finding  of  the  court.  It  was  competent  for  the  court  to  infer 
from  all  the  evidence  that  the  defendants  who  were  present  at 
the  class  meeting  at  which  it  was  voted  to  publish  a  vnlnnr__ 
to  be  called,  "  The  Brown  and  Blue,"  either  voted  to  publish 
the  volume  or  assented  to  the  vote.  This  is  also  true  of  the 
vote  by  which  Arnold  was  elected  "  business  manager  of  the 
publication."  The  contract  made  by  Arnold  was  apparently 
yit.hin_l-.lip  snopp  of  his  employment,  at  least  the  court  could 
so  find.  Newell  v.  Borden,  128  Mass.  31 ;  May  v.  Powers, 
134  Mass.  22.  Exceptions  overruled. 


e.     Capacity  of  agents. 

§  23.]    LYON   &  CO.  v.  KENT,  PAYNE   &  CO. 
45  Alabama,  656.  —  1871. 

Action  of  detinue  for  the  recovery  of  a  quantity  of  cotton. 
Judgment  for  plaintiffs.     Defendants  appeal. 

Kent,  Payne  &  Co.,  citizens  of  Virginia,  had,  during  the 
civil  war,  a  quantity  of  cotton  in  Alabama,  in  the  custody  of 
their  agent,  Browder.  They  gave  to  Singleton,  a  citizen  of 
Illinois,  an  order  upon  Browder  for  the  cotton.  Singleton 
took  possession  of  it,  and  subsequently  sold  it  to  Guy.  Guy 
deposited  it  for  storage  in  the  warehouse  of  Lyon  &  Co. 
There  was  a  conflict  of  evidence  as  to  whether  Singleton  was 
given  authority  to  sell  the  cotton,  or  any  title  passed  to  him. 

Peters,  J.  (after  deciding  that  a  sale  to  Singleton  would 
have  been  void  as  a  commercial  transaction  between  citizens 


§  23.]  LYON  V.  KENT.  31 

of  hostile  portions  of  the  countoy.)  Yet,  though  the  order  of 
itself  was  not  evidence  of  a  sale  to  Singleton,  or  a  power  to 
sell,  it  shows  that  the  owners  of  the  cotton  had  authorized 
him  to  take  possession  of  it.  This  he  could  do  as  the  agent 
of  the  owners.  This  was  not  forbidden  to  him  or  to  them  by 
law,  or  the  policy  of  the  government.  They  could  change  the 
agency  of  the  custody  of  their  cotton  from  one  person  to 
another;  and  they  could  make  any  person,  capable  of  acting 
as  an  agent,  such  agent  to  take  possession  of  their  property 
for  them,  and  keep  it  for  them.  They  could  transfer  its 
custody  from  Browder  to  Singleton  without  a  violation  of 
law.  The  objection  which  might  be  supposed  to  exist  to 
such  an  agency  during  the  war  ceased  as  soon  as  the  war  was 
ended ;  and  its  purpose  being  then  legal,  it  might  be  legally 
consummated.  Any  one,  except  a  lunatic,  imbecile,  or  child 
of  tender  years,  may  be  an  agent  for  another.  It  is  said  by 
an  eminent  author  and  jurist,  that  "it  is  by  no  means 
necessary  for  a  person  to  be  sui  juris,  or  capable  of  acting  in 
his  or  her  own  right,  in  order  to  qualify  himself  or  herself  to 
act  for  others.  Thus,  for  example,  monks,  infants,  femes 
covert,  persons  attainted,  outlawed,  or  excommunicated,  vil- 
lains and  aliens,  may  be  agents  for  others."  Story's  Agenc}', 
§§  6,  7,  9.  So,  a  slave,  who  is  homo  non  civilis,  a  person  who 
is  but  little  above  a  mere  brute  in  legal  rights,  may  act  as 
the  agent  of  his  owner  or  his  hirer.  Powell  v.  The  State,  27 
Ala.  51;  Stanley  v.  Nelson,  28  Ala.  514.  It  was,  then,  cer- 
tainly not  unlawful,  or  against  the  public  policy  of  the  nation, 
for  Kent,  Payne  &  Co.  to  keep  their  cotton,  and  keep  it 
safely,  during  the  late  rebellion.  It  is  the  undoubted  law  of 
agency,  that  a  person  may  do  through  another  what  he  could 
do  himself  in  reference  to  his  own  business  and  his  own 
property ;  because  the  agent  is  but  the  principal  acting  in 
another  name.  The  thing  done  by  the  agent  is,  in  law,  done 
by  the  principal.  This  is  axiomatic  and  fundamental.  It 
needs  no  authorities  to  support  it.  Qui  facit  per  alinm,  facit 
per  se.  Broom's  Max.,  margin  ;  1  Parsons  on  Cont.  5th  ed. 
p.  39  et  seq. ;  Story's  Agency,  §  440.     And  to  this  it  may 


32  AGENCY  BY  AGREEMENT.  [CH.  II. 

be  added  that  an  agent,  in  dealing  with  the  property  of  his 
principal,  must  confine  his  acts  to  the  limit  of  his  powers ; 
otherwise  the  principal  will  not  be  bound.  1  Parsons  on  Cont. 
41, 42,  5th  ed. ;  Powell  v.  Henry,  27  Ala.  612  ;  Bott  v.  McCoy 
et  cd.,  20  Ala.  578;  Allen  v.  Ogden,  1  W.  C.  C.  174.  And  it 
is  also  the  duty  of  one  dealing  with  an  agent  to  know  what 
his  powers  are,  and  the  extent  of  his  authority.  Van  Eppes 
v.  Smith,  21  Ala.  317 ;  Owings  v.  HuU,  9  Pet.  607.  Then, 
the  agency  to  receive  the  delivery  of  cotton  from  Browder,  in 
compliance  with  the  order,  was  not  illegal.  If  it  went  beyond 
that  it  was  void.  And  those  who  dealt  with  Singleton  were 
bound  to  know  this,  as  they  were  bound  to  know  the  law. 
9  Peters,  607,  supra. 

There  was  conflict  in  the  testimony  before  the  jury  as  to 
the  extent  and  character  of  the  agency  of  Singleton.  There 
was  a  wide  difference  between  his  statement  and  that  of 
Kent,  with  whom  he  transacted  the  business  about  the  cotton, 
as  to  the  purpose  and  scope  of  the  agency  intended  to  be 
established.  It  is  not  to  be  presumed  that  the  parties 
intended  to  violate  the  law.  But  whether  the}'  did  or  not, 
and  what  were  the  powers  intended  to  be  conferred  upon  the 
agent,  are  questions  for  the  jury.  This  is  the  effect  of  the 
charge.  It  was  pertinent  to  the  testimony,  and  does  not  mis- 
state the  law.     Such  a  charge  is  not  error. 

(The  court  then  decides  that  there  was  no  error  in  refusing 
certain  charges  asked  for  by  the  defendants. ) 

Judgment  affirmed. 


4.  Form  of  contract. 

a.     Under  the  Statute  of  Frauds. 

§  26.]  JOHNSON   v.  DODGE.    . 

17  Illinois,  433.  — 1856. 

Suit  for  specific  performance.    Bill  dismissed.     Complain- 
ant brings  writ  of  error. 


§  26.]  JOHNSON  V.  DODGE.  33 

Skinner,  J.  This  was  a  bill  in  equit}',  for  the  specific 
performance  of  a  contract  for  the  sale  of  land. 

The  bill  and  proofs  show  that  one  Iglehart,  a  general  land 
agent,  executed  a  contract  in  writing  in  the  name  of  Dodge, 
the  respondent,  for  the  sale  of  certain  land  belonging  to 
Dodge,  to  one  Walters,  and  received  a  portion  of  the  pur- 
chase money :  that  Walters  afterwards  assigned  the  con- 
tract to  Johnson,  the  complainant;  a  tender  of  performance 
on  the  part  of  Walters,  and  on  the  part  of  Johnson,  and  a 
refusal  of  Dodge  to  perform  the  contract.  The  answer  of 
Dodge,  not  under  oath,  denies  the  contract  and  sets  up  the 
Statute  of  Frauds  as  a  defence  to  an}-  contract  to  be  proved. 
The  evidence,  to  our  minds,  establishes  a  parol  authority 
from  Dodge  to  Iglehart  to  sell  the  land,  substantial!  j-  accord- 
ing to  the  term  of  the  writing.  It  is  urged  against  the  relief 
prayed,  that  Iglehart,  upon  a  parol  authority  to  sell,  could 
not  make  for  Dodge  a  binding  contract  of  sale  under  the 
Statute  of  Frauds ;  that  the  proofs  do  not  show  an  authority 
to  Iglehart  to  sign  the  name  of  Dodge  to  the  contract,  and 
therefore  that  the  writing  is  not  the  contract  of  Dodge  ;  that 
the  writing  not  being  signed  by  the  vendee  is  void  for  want 
of  mutuality ;  that  no  sufficient  tender  of  performance  on 
the  part  of  complainant  is  proved,  and  that  the  proof  shows 
that  the  authority  conferred  was  not  pursued  by  the  agent. 
Equity  will  not  decree  specific  performance  of  a  contract 
founded  in  fraud  ;  but  where  the  contract  is  .for  the  sale  of 
land,  and  the  proof  shows  a  fair  transaction,  and  the  case 
alleged  is  clearly  established,  it  will  decree  such  performance. 

In  this  case,  the  contract,  if  Iglehart  had  authority  to 
make  it,  is  the  contract  of  Dodge  and  in  writing ;  and  it  is 
the  settled  construction  of  the  Statute  of  Frauds,  that  the 
authority  to  the  agent  need  not  be  in  writing,  and  by  this 
construction  we  feel  bound.  1  Parsons  on  Cont.  42,  and 
cases  cited;  Doty  v.  Wilder,  15  111.  407  ;  2  Parsons  on  Cont. 
292,  293,  and  cases  cited ;  Saunders'  PI.  and  Ev.  541, 
542,  and  551 ;  Story  on  Agency,  50 ;  2  Kent's  Com.  614. 
Authority  from  Dodge  to  Iglehart  to  sell  the  land  included 

3 


34  AGENCY  BY  AGREEMENT.  [CH.  n. 

the  necessary  and  usual  means  to  make  a  binding  contract  in 
the  name  of  the  principal.  If  the  authority  to  sell  may  be 
created  by  parol,  from  this  authority  may  be  implied  the 
power  to  use  the  ordinary  and  usual  means  of  effecting  a 
valid  sale ;  and  to  make  such  sale  it  was  necessary  to  make 
a  writing  evidencing  the  same.  If  a  party  is  present  at  the 
execution  of  a  contract  or  deed,  to  bind  him  as  a  party  to 
it,  when  his  signature  is  affixed  by  another,  it  is  necessary 
that  the  person  so  signing  for  him  should  have  direct 
authority  to  do  the  particular  thing,  and  then  the  signing  is 
deemed  his  personal  act.  Story  on  Agencj',  51.  In  such 
case  the  party  acts  without  the  intervention  of  an  agent,  and 
uses  the  third  person  only  as  an  instrument  to  perform 
the  act  of  signing.  This  is  not  such  a  case.  The  agent  was 
authorized  to  negotiate  and  conclude  the  sale,  and,  for  that 
purpose,  authority  was  implied  to  do  for  his  principal  what 
would  have  been  incumbent  on  the  principal  to  do  to  accom- 
plish the  same  thing  in  person.  Hawkins  v.  Chace,  19  Pick. 
502 ;  2  Parsons  on  Cont.  291  ;  Story  on  Agenc}T,  Chap.  6 ; 
Hunt  v.  Gregg,  8  Blackford,  105  ;  Lawrence  v.  Taylor,  5 
Hill,  107,  15  111.  411 ;  Vanada  v.  Hopkins,  1  J.  J.  Marsh. 
285  ;    Yerby  v.  Grigsby,  9  Leigh,  387. 

The  mode  here  adopted  was  to  sign  the  name  of  Dodge, 
"by"  Iglehart,  "his  agent,"  and  it  is  the  usual  and  proper 
mode  in  carrying  out  an  authority  to  contract  conferred  on 
an  agent.  But  if  the  signing  the  name  of  the  principal  was 
not  authorized  by  the  authority  to  sell,  yet  the  signature  of 
the  agent  is  a  sufficient  signing  under  the  statute.  The 
language  of  the  statute  is,  "  signed  by  party  to  be  charged 
therewith,  or  some  other  person  thereto  by  him  lawfully 
authorized."  If  Iglehart  had  authority  to  sign  Dodge's 
name,  then  the  contract  is  to  be  treated  as  signed  by  Dodge  ; 
and  if  Iglehart  had  authority  to  sell,  in  any  view,  his  signa- 
ture to  the  contract  is  a  signing  by  "  some  other  person 
thereto  by  him  lawfully  authorized,"  within  the  statute. 
Trueman  v.  Loder,  11  Ad.  and  El.  589  ;  2  Parsons  on  Cont. 
291.     It  is  true  that  authority  tn  f>on^y  must  be  in  writing 


§  26.]  GOEDON  V.   BULKELEY.  35 

and  by  deed_;  for  land  can  only  be  convej-cd  by  deed,  and 
the  power  must  be  of  as  high  dignity  as  the  act  to  be  per- 
formed under  it.  It  was  not  necessary  to  the  obligation  of 
the  contract  that  it  should  have  been  signed  by  the  vendee. 
His  acceptance  and  possession  of  the  contract  and  payment 
of  money  under  it  are  unequivocal  evidences  of  his  concur- 
rence, and  constitute  him  a  party  as  fulty  and  irrevocably  as 
his  signing  the  contract  could.  2  Parsons  on  Cont.  290 ; 
McCrea  v.  JPurmort,  16  Wend.  460;  /Shirley  v.  Shirley,  7 
Blackford,  452. 

We  cannot  question  the  sufficiency  of  the  tender  in  equity 
to  entitle  the  complainant  to  specific  performance.  Webster 
et  al.  v.  French  et  al.,  1 1  111.  254.  Nor  do  we  find  any  sub- 
stantial departure  in  the  contract  from  the  authorit}*  proved. 
While  we  hold  that  the  authority  to  the  agent  who  for  his 
principal  contracts  for  the  sale  of  land  need  not  be  in  writ- 
ing, vet  we  should  feel  hound  to  refuse  a  specific  performance 
of  a  contract  made  with  an  agent  upon  parol  authorit}-,  with- 
out full  and  satisfactory  proof  of  the  authority,  or  where  jt 
should  seem  at  all  doubtful  whether  the  authority  was  not 
assumed  and  the  transaction  fraudulent. 

Decree  reversed  and  cause  remanded. 

Decree  reversed. 


b.  In  the  execution  of  sealed  instruments. 
§  26.]  GORDON  v.  BULKELEY. 

14  Sergeant  &  Rawle  (Pa.),  331.  — 1826. 

Action  of  debt  upon  a  bond.  Plea,  non  est  factum. 
Judgment  for  plaintiff.  The  bond  was  signed  and  sealed  by 
John  Gordon,  for  himself  and  Groves  Gordon,  in  the  absence 
of  the  latter,  but  under  a  parol  authority. 

Rogers,  J.  The  single  question  in  this  case  is,  whether 
a  bond  can  be  executed  in  the  absence  of  one  of  the  obligors, 


36  AGENCY  BY  AGREEMENT.  [CH.  II. 

by  the  other  signing  the  name  of  the  absent  obligee,  and 
affixing  his  seal,  having  but  a  parol  authority  to  do  so? 

Public  convenience  requires,  that  one  man  should  have 
power  to  authorize  another  to  execute  a  contract  for  him,  as 
the  business  may  be  frequently  as  well  performed  by  attor- 
ney as  in  person.  But  it  is  a  general  rule,  that  such  delega- 
tion or  authority  must  be  by  deed,  that  it  may  appear  that 
the  attorney  or  substitute  had  a  commission  or  power  to  rep- 
resent the  part}' ;  and,  further,  that  it  may  appear  that  the 
authority  was  well  pursued.     1  Bac.  Ab.  199  ;  Co.  Litt.  48  b. 

But  this  is  said  to  be  different  from  a  letter  of  attorney, 
and,  in  some  respects,  it  may  be  distinguished  from  the  cases 
cited ;  but  there  is  no  difference  in  principle.  Great  abuse 
might  arise,  if  one  man,  and  particularly  an  insolvent  debtor, 
should  have  it  in  his  power  to  bind  another  in  his  absence  by 
so  solemn  an  instrument  as  a  deed,  with  a  mere  parol  au- 
thority ;  in  such  a  case,  society  would  be  too  much  exposed 
to  the  designs  of  the  artful  and  unprincipled,  supported,  as 
the}'  would  frequently  be,  by  the  testimony  of  confederated 
and  perjured  witnesses.  The  distinction  has  been  taken 
between  a  sealed  and  an  unsealed  instrument,  between  a 
bond  and  a  promissory  note.  No  man  can  bind  another  b}' 
deed,  unless  he  has  been  authorized  by  deed  to  do  it ;  and  if 
a  person,  however  authorized,  if  not  by  an  instrument  under 
seal,  make  and  execute  a  deed,  expressed  to  be  in  behalf  of 
his  principal,  the  principal  is  not  bound  by  the  deed,  although 
he  who  made  it  is  bound.  Banorgee  v.  Hovey  et  al.,  5  Mass. 
Rep.  1 1  ;  Hatch  v.  Smith,  5  Mass.  Rep.  42. 

A  written  or  parol  authority  is  sufficient  to  authorize  a 
person  to  make  a  simple  contract,  as  agent  or  attorney,  and 
to  bind  his  principal  to  the  performance  of  it,  without  a  for- 
mal letter  of  attorney  under  seal.  Stackpole  v.  Arnold,  11 
Mass.  Rep.  27;  Long  v.  Colburn,  11  Mass.  Rep.  97;  The 
President,  &c,  of  Northampton  Bank  v.  Pepoon,  11  Mass. 
Rep.  288. 

The  distinction  then  appears  to  be  clearly  taken  between 
&  contract  under  seal  and  a  simple  contract,  and  I  feel  no 


§  26.]  GAEDNEB   V.   GARDNER.  37 

disposition  to  extend  the  law,  believing  that  public  policy 
requires  that  the  operation  of  a  parol  authority  should  be 
rather  restricted  than  enlarged.  The  case  we  have  now 
under  consideration  is  an  exceedingly  strong  one :  an  insol- 
vent debtor,  attempting  to  bind  another  as  his  surety,  by 
bond,  in  the  absence  of  the  surety,  and  with  but  mere  parol 
authority  to  do  so.  As  then  Groves  Gordon  was  not  present 
when  the  bond  was  executed,  and  John  Gordon  had  no  writ- 
ten authority  to  execute  the  bond,  I  am  of  opinion  that, 
although  it  is  the  bond  of  John  Gordon,  yet  it  is  not  the  bond 
of  Groves  Gordon,  the  surety.  9  Johns.  285. 
Judgment  reversed,  and  a  venire  facias  de  novo  awarded. 


§  26.]  GARDNER  v.  GARDNER. 

5  Cushing  (Mass.),  483.  —  1850. 

Writ  of  Entry  to  foreclose  a  mortgage.  Conditional 
judgment  for  demandant,  subject  to  the  opinion  of  the  court 
as  to  whether  the  mortgage  deed  was  properly  executed. 
The  grantor's  name  was  signed  in  her  presence  by  her 
daughter,  acting  under  parol  authority. 

Shaw,  C.  J.  The  only  question  is  upon  the  sufficiency  of 
the  execution  of  a  mortgage  deed,  as  a  good  and  valid  deed 
of  Polly  Gwinn.  The  execution  of  the  deed  is  objected  to, 
on  the  ground  that  when  a  deed  is  executed  by  an  agent  or 
attorney,  the  authority  to  do  so  must  be  an  authorit}-  of  as 
high  a  nature,  derived  from  an  instrument  under  the  seal 
of  the  grantor.  This  is  a  good  rule  of  law,  but  it  does  not 
apply  to  the  present  case.  The  name  being  written  by 
another  hand,  in  the  presence  of  the  grantor,  and  at  her 
request,  is  her  act.  The  disposing  capacity,  the  act  of  mind, 
which  are  the  essential  and  efficient  ingredients  of  the  deed, 
are  hers,  and  she  merely  uses  the  hand  of  another,  through 
incapacit}-  or  weakness,  instead  of  her  own,  to  do  the  physi- 
cal act  of  making  a  written  sign.     Whereas,  in  executing  a 


38  AGENCY  BY  AGREEMENT.  [CH.  II. 

deed  by  attorney,  the  disposing  power,  though  delegated,  is 
with  the  attorney,  and  the  deed  takes  effect  from  his  act ; 
and  therefore  the  power  is  to  be  strictly  examined  and  con- 
strued, and  the  instrument  conferring  it  is  to  be  proved  bj' 
evidence  of  as  high  a  nature  as  the  deed  itself.  To  hold 
otherwise  would  be  to  decide  that  a  person  having  a  clear 
mind  and  full  capacity,  but  through  physical  inability  inca- 
pable of  making  a  mark,  could  never  make  a  convejance  or 
execute  a  deed ;  for  the  same  incapacity  to  sign  and  seal  the 
principal  deed  would  prevent  him  from  executing  the  letter 
of  attorney  under  seal. 

It  appears  to  us  that  the  distinction  between  writing  one's 
name  in  his  presence  and  at  his  request,  and  executing  a 
deed  by  attorney,  is  obvious,  well  founded,  stands  on  satis- 
factory reasons,  and  is  well  sustained  by  authorities.  Ball 
v.  Dimsterville,  4  T.  R.  313  ;  The  King  v.  Longnor,  1  Nev. 
and  M.  576,  S.  C.  4  Barn,  and  Adol.  647 ;  2  Greenl.  Ev. 
sec.  295.  We  think  the  deed  was  well  executed  by  Polly 
Gwinn ;  and  the  judgment  must  therefore  stand  for  the 
demandant. 


CHAPTER  III. 

FORMATION  OF  THE  RELATION  BY  RATIFICATION. 
1.    Act  must  be  performed  in  behalf  of  existing  person. 

§  32.]  In  Re  NORTHUMBERLAND  AVENUE  HOTEL 
COMPANY. 

L.  R.    33  Chancery  Division  (C.  A.),  16.— 1886. 

Application  by  Sully,  as  trustee  of  Wallis,  to  be  admitted 
as  a  creditor  in  the  winding  up  of  the  hotel  company.  Ap- 
plication denied     Applicant  appeals. 

Wallis  leased  grounds  to  one  Doyle,  "  as  trustee  for  and 
on  behalf  of  an  intended  company,  to  be  called  the  Northum- 
berland Avenue  Hotel  Company."  The  company  was  incor- 
porated, accepted  Doyle's  contract,  took  possession  of  the 
premises,  and  paid  rent  to  Wallis.  This  proceeding  is  for 
damages  for  breach  of  the  contract  entered  into  between 
Wallis  and  Doyle. 

Cotton,  L.  J.  This  is  an  appeal  from  a  decision  of  Mr. 
Justice  Chitty  in  what,  although  in  form  it  was  a  summons 
from  chambers  in  a  winding-up,  was  in  substance  an  action 
for  damages  for  breach  of  an  agreement  alleged  to  have  been 
entered  into  between  Mr.  Wallis,  whom  the  claimant  repre- 
sents, and  the  companj\  The  first  thing,  therefore,  that  we 
have  to  see  is  whether  in  fact  there  was  an}r  contract  be- 
tween them.  I  am  not  referring  to  the  question  whether  a 
contract  was  made  which,  in  consequence  of  the  provisions  of 
some  Act  of  Parliament,  was  incapable  of  being  enforced, 
but  to  the  question  whether  in  fact  there  was  any  agreement 
between  these  two  parties. 

The  company  was  incorporated  on  the  25th  of  Jul}*,  1882, 
and  before  that  date,  viz.,  on  the  24th  of  July,  a  contract  in 


v 


40  AGENCY  BY  RATIFICATION.  [CH.  m. 

writing  was  entered  into  between  a  gentleman  acting  as  agent 
for  and  on  behalf  of  Mr.  Wallis,  and  another  gentleman,  who 
described  himself  as  a  trustee  for  the  compatn',  the  com- 
pany, in  fact,  having  no  existence  at  the  time.  That  was  a 
contract  which  was  binding  as  between  Mr.  Wallis  and  the 
other  gentleman  whom  I  have  mentioned,  and  was  a  contract 
which  provided  that  certain  things  should  be  done  by  the  com- 
pany. That  contract  in  no  way  bound  the  company,  because 
the  company  at  that  time  was  not  formed.  In  fact  it  was 
not  in  terms  a  contract  with  the  compan}*,  although  it  was  a 
contract  by  a  person  who  purported  to  act  for  the  company 
that  certain  things  should  be  done  by  the  company.  It  is 
not  contended  that  this  contract  was  in  any  way  binding  on 
the  company,  nor  is  it  disputed  that  the  companj-  after  it 
was  formed  could  not  ratify  the  authority  of  the  gentleman 
who  purported  to  act  as  their  trustee  before  they  were  incor- 
porated, and  who  therefore  could  not  have  any  authority  to 
do  so. 

But  it  is  said  that  we  ought  to  hold  that  there  was  a  con- 
tract entered  into  between  the  company  and  Wallis  on  the 
same  terms  (except  so  far  as  they  were  subsequently  modi- 
fied) as  those  contained  in  the  contract  of  the  24th  of  July, 
1882.  In  nry  opinion  that  will  not  hold.  It  is  very  true  that 
there  were  transactions  between  Wallis  and  the  company, 
in  which  the  company  acted  on  the  terms  of  that  contract 
entered  into  with  Wallis  by  the  person  who  said  he  was 
trustee  for  them.  But  why  did  the  company  do  so?  The 
company  seem  to  have  considered,  or  rather  its  directors  seem 
to  have  considered,  that  the  contract  was  a  contract  binding 
on  the  company.  But  the  erroneous  opinion  that  a  contract 
entered  into  before  the  compan}*  came  into  existence  was 
binding  on  the  compan}',  and  the  acting  on  that  erroneous 
opinion,  does  not  make  a  good  contract  between  the  com- 
pany and  Mr.  Wallis  ;  and  all  the  acts  which  occurred  subse- 
quentty  to  the  existence  of  the  company  were  acts  proceeding 
on  the  erroneous  assumption  that  the  contract  of  the  24th  of 
July  was  binding  on  the  compan}T.     In  my  opinion  that  ex- 


§  32.]         NORTHUMBERLAND  AVE.   HOTEL  CO.  41 

plains  the  whole  of  these  transactions.  The  case  is  entirely 
different  from  those  cases  which  have  been  referred  to  where 
the  court,  finding  a  person  in  possession  of  land  of  a  cor- 
poration, and  paying  rent,  has  held  that  there  was  a  contract 
of  tenancy.  There  was  no  mode  of  explaining  why  the  occu- 
pier was  there,  except  a  tenancy,  unless  he  was  to  be  treated 
as  a  trespasser.  The  receipt  of  rent  by  the  corporation 
negatived  his  being  a  trespasser,  and  it  was  therefore  held 
that  there  was  a  tenancy.  Here  we  can  account,  and  in  niy 
opinion  we  ought  to  account,  for  the  possession  by  the  com- 
pany, and  for  what  it  has  done,  by  reference  to  the  agree- 
ment of  the  24th  of  Jul}',  which  the  directors  erroneously 
and  wrongly  assumed  to  be  binding  upon  them.  We  are  not 
therefore  authorized  to  infer  a  contract  as  it  was  inferred  in 
those  cases  where  there  was  no  other  explanation  of  the 
conduct  of  the  parties. 

In  my  opinion  the  decision  of  Mr.  Justice  Chitty  was 
right,  and  the  appeal  must  therefore  fail. 

Likdley,  L.  J.  I  am  of  the  same  opinion.  The  more 
closely  the  case  is  investigated,  the  more  plainly  does  it  ap- 
pear that  there  never  was  an}'  contract  between  the  company 
and  Wallis.  The  more  closely  the  facts  are  looked  into,  the 
more  plain  is  it  that  everything  which  the  company  did,  from 
the  taking  possession  down  to  the  very  last  moment,  was 
referable  to  the  agreement  of  the  24th  of  July,  1882,  which 
the  directors  erroneously  supposed  to  be  binding  on  the  com- 
pany. I  therefore  cannot  come  to  any  other  conclusion  than 
the  conclusion  at  which  Mr.  Justice  Chitty  arrived. 

Lopes,  L.  J.     I  am  entirely  of  the  same  opinion. 

The  question  is  whether  there  was  a  contract  between 
Wallis  and  the  company.  There  no  doubt  was  an  agreement 
between  a  man  called  Nunneley,  who  was  agent  for  Wallis, 
and  a  man  named  Doyle,  who  described  himself  as  trustee 
for  the  company.  But  at  that  time  the  company  was  not 
incorporated,  and  therefore  it  is  perfectly  clear  that  the 
agreement  was  inoperative  as  against  the  compan}*.  It  is  also 
equally  clear  that  the  company,  after  it  came  into  existence, 


42  AGENCY  BY  RATIFICATION.  [CH.  HI. 

could  not  ratify  that  contract,  because  the  company  was  not 
in  existence  at  the  time  the  contract  was  made.  No  doubt 
the  compan}*,  after  it  came  into  existence,  might  have  entered 
into  a  new  contract  upon  the  same  terms  as  the  agree- 
ment of  the  24th  of  Jul}*,  1882  ;  and  we  are  asked  to  infer 
such  a  contract  from  the  conduct  and  transactions  of  the 
company  after  they  came  into  existence.  It  seems  to  me 
impossible  to  infer  such  a  contract,  for  it  is  clear  to  my  mind 
that  the  company  never  intended  to  make  any  new  contract, 
because  they  firmly  believed  that  the  contract  of  the  24th  of 
July  was  in  existence,  and  was  a  binding,  valid  contract. 
Everything  that  was  done  by  them  after  their  incorporation 
appears  to  me  to  be  based  upon  the  assumption  that  the  con- 
tract of  the  24th  of  Jul}*,  1882,  was  an  existing  and  binding 
contract.  I  think,  therefore,  that  the  appeal  ought  to  be 
dismissed. 


§  32.]     Mc ARTHUR  v.  TIMES  PRINTING  CO. 

48  Minnesota,  319.  — 1892. 

Action  for  damages  for  breach  of  contract.  Verdict  for 
plaintiff.     Motion  for  new  trial  denied.     Defendant  appeals. 

Mitchell,  J.  The  complaint  alleges  that  about  October  1 , 
1889,  the  defendant  contracted  with  plaintiff  for  his  services 
as  advertising  solicitor  for  one  year ;  that  in  April,  1890,  it 
discharged  him,  in  violation  of  the  contract.  The  action  is 
to  recover  damages  for  the  breach  of  the  contract.  The 
answer  sets  up  two  defences :  (1)  That  plaintiffs  employ- 
ment was  not  for  any  stated  time,  but  only  from  week  to 
week ;  (2)  that  he  was  discharged  for  good  cause.  Upon  the 
trial  there  was  evidence  reasonably  tending  to  prove  that  in 
September,  1889,  one  C.  A.  Nimocks  and  others  were  engaged 
as  promoters  in  procuring  the  organization  of  the  defendant 
company  to  publish  a  newspaper ;  that,  about  September  12th, 
Nimocks,  as  such  promoter,  made  a  contract  with  plaintiff, 


§  32.]  MCARTHUR  V.   TIMES  PRINTING  CO.  43 

in  behalf  of  the  contemplated  company,  for  his  services  as 
advertising  solicitor  for  the  period  of  one  year  from  and  after 
October  1st,  —  the  date  at  which  it  was  expected  that  the 
company  would  be  organized ;  that  the  corporation  was  not, 
in  fact,  organized  until  October  16th,  but  that  the  publication 
of  the  paper  was  commenced  by  the  promoters  October  1st, 
at  which  date  plaintiff,  in  pursuance  of  his  arrangement  with 
Nimocks,  entered  upon  the  discharge  of  his  duties  as  adver- 
tising solicitor  for  the  paper ;  that  after  the  organization  of 
the  company  he  continued  in  its  employment  in  the  same 
capacity  until  discharged,  the  following  April ;  that  defend- 
ant's board  of  directors  never  took  any  formal  action  with 
reference  to  the  contract  made  in  its  behalf  by  Nimocks,  but 
all  of  the  stockholders,  directors,  and  officers  of  the  corpora- 
tion knew  of  this  contract  at  the  time  of  its  organization, 
or  were  informed  of  it  soon  afterwards,  and  none  of  them 
objected  to  or  repudiated  it,  but,  on  the  contrary,  retained 
plaintiff  in  the  employment  of  the  company  without  any  other 
or  new  contract  as  to  his  services. 

There  is  a  line  of  ca,«R«  whifh  hnld  that.  xchoYo  a  noateagjj  Jfl  O^S  ^ 
made  in  behalf  of,  and  for  the  benefit  of.  a  projected  corpora-  ~~  /-., 
tion,  the  corporation,  after  its  organization,  mnnnf  lwrnnq  «,  f>"       ** 
party  to  the  contract,  either  by  adoption  or  ratification  of  KtS^j3'  §4 
Abbott  v.  Bapgood,  150  Mass.  248  (22  N.  E.  Rep.  907); 
Beach,  Corp.  §   198.     This,  however,  seems  to  be  more  a 
question  of  name  than  of  substance ;  that  is,   whether  the 
liability  of  the  corporation,  in  such  cases,  is  to  be  placed  on 
the  grounds  of  its  adoption  of  the  contract  of  its  promoters, 
or  upon  some  other  ground,  such  as  equitable  estoppel.   This 
court^in  accordance  with  what  we  deem  sound  reason^as 
well  as  the  weight  of  authority,  has  held  that,  while  a  corpora-  /)-.}Uu:C 
tipn  is  not  bound  by  engagements  made  on  its  behalf  by  its 
promoters  before  its  organization,  it  may,  after  its  organiza- 
tion, make  such  engagements  its  own  contracts.     And  this  it 
may  do  precisely  as  it  might  make  similar  original  contracts  ; 
formal  action  of  its  board  of  directors  being  necessary  only 
where  jt  would  be  necessary  in  the  case  of  a  similar  original 


44  AGENCY  BY  RATIFICATION.  [CH.  m. 

contract  That  it  is  not  requisite  that  such  adoption  or  ac- 
ceptance be  expressed,  but  it  may  be  inferred  from  acts  or 
acquiescence  on  part  of  the_corporation,  or  its  authorized 
agents,  as  an}'  similar  original  contract  might  be  shown. 
BatteUe  v.  Northwestern  Cement  <&  Concrete  Pavement  Co., 
37  Minn.  89  (33  N.  W.  Rep.  327)  ;  see,  also,  Mor.  Corp.  §  548. 
The  right  of  the  corporate_agents  to  adopt  an.  agreement 
originally  made  by_promoters_depends^  upoii  the  purposea_of 
the  corporation  andjthe  nature  of  thejtgreement.  Of  course, 
the  agreement  must  be  one  which  the  corporation  itself  could 
make,  and  one  which  the  usual  agents  of  the  company  have 
express  or  implied  authorit}-  to  make.  That  the  contract  in 
this  case  was  of  that  kind  is  very  clear ;  and  the  acts  and 
acquiescence  of  the  corporate  officers,  after  the  organization 
of  the  company,  fully  justified  the  jury  in  finding  that  it  had 
adopted  it  as  its  own. 

The  defendant,  however,  claims  that  the  contract  was  void 
under  the  Statute  of  Frauds,  because,  "  by  its  terms,  not  to 
be  performed  within  one  year  from  the  making  thereof," 
which  counsel  assumes  to  be  September  12th,  —  the  date  of 
the  agreement  between  plaintiff  and  the  promoter.  This 
proceeds  uponthe  erroneous  theory  that  the  act  of  the  cor- 
poration ,^in  such  cases,  is  a  ratification  which  relates  back 
to  the  date  of  the  contract  with  the_promoter,_under  the 
familiar  maxim  that  "  a  subsequent  ratification  has  a  retro- 
active effect,  and  is  equivalent  to  a  prior  command."  But 
theliability  of  the  corporation^under  suchjjrnnmstftnnpH, 
does  not  rest  upon  any  principle  jofthe  law  of  agency,  but 
upon  the  immediate  and^jy^luntary  act  pf  the  cornpaqy. 
Although  the  acts  of  a  corporation  with  reference  to  the 
contracts  made  by  promoters  in  its  behalf  before  its  organi- 
zation are  frequently  loosely  termed  "ratification,"  yet  a 
"  ratification,"  properly  so  called,  implies  an  existing  person, 
on  whose  SeEalTjhe  contract  migTitThave  been  made  at  the 
time.  There^  cannot,  in  law,  be  a  ratification  of  a  contract 
which  could  not  have  been  made  binding  on  the  ratifier  atjthe 
timejt  was  made,  because  the  ratifier  was  not_then  in  exist- 


§  32.]     WESTERN  PUB.  HOUSE  V.  DIST.  TP.  OF  ROCK.      45 

ence.  In  re  impress  Engineering  Co.,  16  Ch.  Div.  125  ; 
Melhado  v.  Porto  Alegre,  JV.  IT.  &  B.  Ry.  Co.,  L.  R.  9  C.  P. 
503 ;  Kelner  v.  Baxter,  L.  R.  2  C.  P.  174.  What  is  called 
"  adoption,"  in  such  cases,,  iaT  in  legal  effect,  the  making  of 
a  contract  of  the  date  of  the  adoption,  and  not  as  of  some 
former  date^.  The  contract  in  this  case  was,  therefore,  not 
within  the  Statute  of  Frauds.  The  trial  court  fairlj'  sub- 
mitted to  the  jury  all  the  issues  of  fact  in  this  case,  accom- 
panied by  instructions  as  to  the  law  which  were  exactly  in 
the  line  of  the  views  we  have  expressed ;  and  the  evidence 
justified  the  verdict. 

The  point  is  made  that  plaintiff  should  have  alleged  that 
the  contract  was  made  with  Nimocks,  and  subsequently 
adopted  by  the  defendant.  If  we  are  correct  in  what  we 
have  said  as  to  the  legal  effect  of  the  adoption  by  the  cor- 
poration of  a  contract  made  by  a  promoter  in  its  behalf  before 
its  organization,  the  plaintiff  properly  pleaded  the  contract 
as  having  been  made  with  the  defendant.  But  we  do  not 
find  that  the  evidence  was  objected  to  on  the  ground  of 
variance  between  it  and  the  complaint.  The  assignments 
of  error  are  very  numerous,  but  what  has  been  already  said 
covers  all  that  are  entitled  to  any  special  notice. 

Order  affirmed. 


§  32.]   WESTERN  PUBLISHING  HOUSE  v.  DISTRICT 
TOWNSHIP  OF  ROCK. 

84  Iowa,  101.— 1891. 

Action  upon  contract  for  purchase  of  books.  Demurrer 
sustained.     Plaintiff  appeals. 

The  petition  set  up  that  certain  members  of  the  board  of 
directors  of  the  defendant  district  signed  a  contract  to  pur- 
chase the  books  in  question  ;  that  later  the  board  of  directors 
form  all}'  ratified  the  purchase ;  that  later  still  the  board  of 
directors  repealed  the  resolution  ratifying  the  purchase. 


46  AGENCY  BY  RATIFICATION.  [CH.  in. 

Beck,  C.  J.  (after  setting  out  the  petition).  A  consid- 
eration of  the  agreement  upon  which  the  plaintiff  bases  its 
right  to  recover,  discloses  the  fact  that  it  does  not  purport 
to  be  the  contract  of  the  defendant,  the  school  district, 
and  that  there  is  not  one  word  in  it  indicating  the  purpose 
of  the  directors  to  bind  the  district,  or  the  intention  of  the 
plaintiff  to  require  it  to  be  bound  by  the  agreement.  The 
obligors  in  the  instrument  describe  themselves  as  directors 
of  the  school  district ;  but  it  does  not  appear  that  the  goods 
sold  were  bought  for  the  use  of  the  defendant,  or  pur- 
suant to  its  authority  or  order.  It  is  stipulated  in  the  con- 
tract that  the  goods  shall  be  shipped  to  the  directors,  not 
to  the  defendant  or  its  officers.  On  the  face  of  the  instru- 
ment, it  is  plainly  shown  that  the  persons  who  signed  the 
instrument,  and  who  are  designated  therein  as  "  directors," 
are  alone  bound  b}-  it  as  obligors.  The  plaintiff  agrees  in  the 
instrument  to  accept  in  payment  an  order  or  warrant  issued 
by  the  defendant ;  but  this  stipulation  does  not  bind  it  to 
look  to  the  defendant  for  payment,  or  make  the  instrument 
its  contract.  Upon  the  face  of  the  instrument  the  defendant 
is  not  bound,  and  the  intention  clearly  appears  to  bind  the 
signers  individually.  The  petition  does  not  allege  or  show 
that  the  defendant  is  bound  by  the  contract,  or  was  intended 
by  the  parties  to  be  bound.  It  specifically  alleges  that  the 
"  members  [of  the  board  of  directors]  agree  to  pay  for  the 
books."  It  alleges  that  the  books  were  "ordered  by  said 
members  of  said  board  of  directors  for  the  use  and  benefit  of 
defendant  in  its  schools."  It  is  not  alleged  that  the  contract 
was  made  pursuant  to  any  prior  order,  request,  or  authority 
of  the  defendant;  and  it  is  averred  that  the  books  "  are 
now  "  in  the  express  office,  thus  showing  and  averring,  nega- 
tively, that  the  goods  have  never  come  into  possession  of  the 
defendant,  and  have  never  been  used  in  its  schools. 

The  plaintiff,  while  inferentially  conceding  that  the  con- 
tract was  made  without  authority,  insists  that  it  was  after- 
wards ratified.  But  as  the  contract  did  not  purport  to  bind 
the  defendant,  it  could  not  ratify  it    There  is  no  such  thing 


§  34.]  STRASSER   r.   CONKLE*.  47 

as  the  ratification  of  a  contract  by  an  obligor  made  by 
another,  when  it,  does  not,  purport  to  bind  him,  but  binds  the 
other.  In  such  a  case  the  obligor  cannot  become  bound  by 
a  ratification.  He  can  only  become  bound  by  a  new  contract 
assuming  or  adopting  the  obligation  of  the  prior  one.  If  it 
be  assumed  that  the  defendant  did  adopt  the  contract  (which 
is  not  alleged  in  the  petition)  it  must  appear  what  the  terms 
of  the  contract  adopting  it  are,  and  that  they  have  been  per- 
formed.    But  no  such  showing  is  made  in  the  petition. 

If  the  action  of  the  board  of  directors  of  March  11th  be 
regarded  as  the  adoption  of  the  individual  contract  of  the 
directors,  it  does  not  appear  that  the  plaintiff  assented  to  or 
accepted  it  at  any  time.  Nor  is  it  shown  that  the  defendant 
acquired  the  right  under  such  adoption,  by  the  assent  of  the 
plaintiff,  to  take  the  property.  It  is  not  shown  that  the 
plaintiff  in  any  way  accepted  such  adoption  of  the  contract 
so  as  to  bind  the  defendant.  Until  that  was  done,  it  could 
withdraw  its  adoption  of  the  contract,  which  it  did  do  by  the 
resolution  and  action  of  its  board  of  directors  in  their  meet- 
ing of  March  18,  1889. 

We  reach  the  conclusion  that  the  contract  was  not  intended 
to  bind  the  defendant,  and  therefore  was  not  ratified  by  it, 
and  that,  if  the  act  claimed  to  be  a  ratification  may  be  re- 
garded as  a  contract  of  adoption,  it  was  rescinded  before  it 
was  accepted,  and  before  the  plaintiff  acquired  thereby  any 
rights  by  reason  of  such  adoption.  These  considerations 
lead  us  to  the  conclusion  that  the  judgment  of  the  district 
court  ought  to  be  Affirmed. 


2.     Assent  may  be  express  or  implied. 

§  34.]  STRASSER  v.  CONKLIN. 

54  Wisconsin,  102.  — 1882. 

Action  for  balance  of  mortgage  debt    Judgment  for  de- 
fendant.    Plaintiff  appeals. 


48  AGENCY  BY  BATIFICATION.  [CH.  in. 

Plaintiff's  assignor  sold  to  defendant's  grantor  certain  hotel 
premises,  and  took  the  latter's  notes  and  mortgage,  at  the 
same  time  assigning  to  the  latter  two  policies  of  insurance  on 
the  hotel  furniture,  but  payable  to  him  as  his  interest  should 
appear.  Defendant,  after  purchasing  the  property,  had  a 
policy  renewed  which  contained  a  like  clause  in  favor  of 
plaintiff's  assignor,  but  without  defendant's  knowledge.  The 
property  burned,  and  plaintiff,  as  assignee  of  the  mortgage, 
claimed  the  insurance  money.  Plaintiff  gave  one  Erb  a  power 
of  attorne}r  to  collect  the  insurance  money.  Erb  agreed  with 
defendant  to  accept  a  certain  portion  of  the  insurance  money 
and  a  reconveyance  of  the  premises  in  satisfaction  of  the 
mortgage.  Plaintiff  accepted  the  money,  but  refused  to 
accept  the  conveyance,  repudiating  Erb's  authority  to  make 
such  an  agreement. 

Lyon,  J.  There  was  a  controversy  between  the  parties  as 
to  whether  the  defendant,  when  he  purchased  the  hotel 
property,  agreed  with  Crane}'  to  pay  the  notes  given  by 
Craney  to  Fisher,  and  assigned  by  the  latter  to  the  plaintiff, 
and  also  as  to  whether  the  insurance  money  belonged  to  the 
plaintiff  or  to  the  defendant.  These  controversies  were  settled 
by  the  defendant  and  Mr.  Erb,  the  latter  assuming  to  act  for 
the  plaintiff.  B3'  the  terms  of  the  settlement  the  plaintiff  was 
to  receive  $653.77  of  the  insurance  monej',  and  a  conve3-ance 
of  the  premises,  mortgaged  by  Craney  to  Fisher  to  secure  the 
payment  of  the  notes,  and  to  release  the  defendant  from  all 
claim  on  the  mortgage.  This  was  declared  to  be  a  full  settle- 
ment of  all  matters  between  the  parties.  The  plaintiff  after- 
wards received  the  insurance  mone\'  thus  stipulated  to  him. 
He  did  so  with  full  knowledge  that  Erb  had  assumed  to  act 
as  his  ajjent  in  negotiating  the  settlement  with  the  defendant, 
and  with  full  knowledge  of  the  terms  of  the  settlement.  The 
evidence  of  this  is  undisputed  and  conclusive.  True,  at  the 
same  time  the  plaintiff  refused  to  accept  the  deed  of  the 
mortgaged  premises,  and  denied  that  Erb  had  authority  to 
make  the  settlement.  But  he  received  and  retained  the 
fruits  of  the  settlement,  —  the  insurance  money. 


§  34.]  STEASSER  V.   CONEXIN.  49 

No  rule  of  law  is  more  firmly  established  than  the  rule  that 
if  one,  with  full  knowledge  of  the  facts,  accepts  the  avails  of 
an  unauthorized  treaty  made  in  his  behalf  by  another,  he 
thereby  ratifies  such  treat}7,  and  is  bound  by  its  terms  and 
stipulations  as  fully  as  he  would  be  had  he  negotiated  it 
himself.  Also,  a  ratification  of  part  of  an  unauthorized 
transaction  of  an  agent  is  a  confirmation  of  the  whole.  If 
authorities  are  desired  to  propositions  so  plain  as  these,  they 
abound  in  the  decisions  of  this  court,  many  of  which  are  cited 
in  the  briefs  of  counsel.  Under  the  above  rules  it  is  entirely 
immaterial  whether  Erb  was  or  was  not  authorized  to  make  the 
settlement  with  the  defendant.  If  not  authorized,  the  plain- 
tiff, by  receiving  the  money  with  full  knowledge  of  the  terms 
of  settlement,  ratified  and  confirmed  what  he  did,  and  cannot 
now  be  heard  to  allege  his  agent's  want  of  authority. 

It  will  not  do  to  say  that  the  plaintiff  was  entitled  to  the 
money  he  received,  and  might  receive  and  retain  it  as  his  own 
without  regard  to  the  settlement.  That  was  the  very  point  of 
the  controversy  between  the  parties.  Manifestly  each  claimed 
the  money  in  good  faith,  and  we  cannot  determine  from  the 
record  before  us  which  was  entitled  to  it ;  and  it  is  immaterial 
whether  one  or  the  other  was  so  entitled,  there  being  a  real 
controversy  between  them  on  that  question.  It  was  therefore 
a  very  proper  case  for  negotiation  and  compromise  between 
them,  and  under  the  circumstances  they  must  both  be  held 
bound  by  the  settlement.  The  evidence  of  ratification  is  con- 
clusive, and  there  was  nothing  for  the  jury  to  determine  in 
that  behalf.  Hence,  the  court  properly  directed  the  jury  to 
find  for  the  defendant. 

The  foregoing  views  dispose  of  the  case,  and  render  it  un- 
necessary to  determine  the  question,  which  was  very  ably 
argued  b}*  counsel,  whether  a  parol  agreement  by  the  defend- 
ant to  pay  the  mortgage  debt  (if  he  so  agreed)  is  within  the 
Statute  of  Frauds,  and  therefore  invalid.  We  leave  the  ques- 
tion undetermined. 

Bt  the  Coukt.     The  judgment  of  the  circuit  court  is 

affirmed. 

4 


50  AGENCY  BY  RATIFICATION.  [CH.  IU. 


§  34.]    WHEELER  AND  WILSON  MFG.  CO.  v. 
AUGHEY. 

144  Pennsylvania  State,  398.  — 1891. 

Action  on  judgment  notes.  Judgment  for  defendant. 
Plaintiff  appeals.  Defendant  gave  evidence  to  prove  that 
plaintiffs  agent  obtained  the  notes  from  defendant  upon  the 
false  representation  that  he  was  not  indebted  to  plaintiff, 
but  wanted  the  notes  as  collateral  security  for  machines 
to  be  furnished  the  agent  by  plaintiff,  while  in  fact  the 
machines  were  not  furnished  and  the  notes  were  used  to 
secure  a  prior  indebtedness  of  the  agent.  Plaintiff  gave  evi- 
dence to  prove  that  defendant  made  the  notes  to  secure  the 
agent's  past  indebtedness. 

Plaintiff  asked  a  charge  that  it  was  not  affected  by  the 
misrepresentation  of  the  agent,  which  was  denied. 

Mr.  Justice  Green.  The  learned  court  below  distinctly 
charged  the  jury  that,  if  the  notes  in  suit  were  given  for  a 
past  indebtedness  of  Landis  to  the  plaintiff,  their  verdict 
should  be  in  favor  of  the  plaintiff;  but  if  the}'  found  that 
they  were  given  for  machines  to  be  furnished  thereafter,  and 
the  machines  were  not  delivered,  the  verdict  should  be  for 
the  defendant.  The  jury  found  for  the  defendant,  and  thereby 
determined  that  the  notes  were  given  for  machines  to  be 
furnished  in  the  future.  There  was  abundant  testimony  in 
support  of  the  defendant's  contention,  and  we  must  therefore 
regard  it  as  an  established  fact  that  the  notes  were  given  in 
consideration  that  machines  should  be  delivered  to  Landis  by 
the  plaintiff  subsequently  to  the  execution  and  delivery  of 
the  notes  in  question.  It  is  beyond  all  question  that  Landis 
obtained  the  signature  of  the  defendant  to  the  notes,  and  that 
he  delivered  the  notes  so  signed  to  the  plaintiffs,  who  received 
and  kept  them,  and  affirmed  their  title  to  them  by  bringing 
suit  upon  them  against  the  defendant.  For  the  purpose  of 
obtaining  the  notes,  Landis  most  certainly  acted  as  the  repre- 


§  34.]       WHEELER  &  WILSON  MFG.  CO.  V.  AUGHEY.       51 

sentative  of  the  plaintiffs,  and  they  conclusively  accepted  the 
fruits  of  his  act.  That  the}'  cannot  do  this  without  being 
subject  to  the  conditions  upon  which  he  obtained  the  notes, 
whether  he  had  authority  or  not  to  make  or  agree  to  those 
conditions,  is  too  well  settled  to  admit  of  an}'  doubt. 

The  whole  doctrine  was  well  expressed  by  Sharswood,  J., 
in  the  case  of  Mundorffx.  Wickersham,  63  Pa.  87:  — 

"  If  an  agent  obtains  possession  of  the  property  of  another, 
by  making  a  stipulation  or  condition  which  he  was  not  author- 
ized to  make,  the  principal  must  either  return  the  property, 
or,  if  he  receives  it,  it  must  be  subject  to  the  condition  upon 
which  it  was  parted  with  by  the  former  owner.  This  propo- 
sition is  founded  upon  a  principle  which  pervades  the  law  in 
all  its  branches :  Qui  sentit  commodum  sentire  debet  et 
onus.  The  books  are  full  of  striking  illustrations  of  it,  and 
more  especially  in  cases  growing  out  of  the  relation  of  prin- 
cipal and  agent.  Thus,  where  a  party  adopts  a  contract 
which  was  entered  into  without  his  authorit}',  he  must  adopt 
it  altogether.  He  cannot  ratify  that  part  which  is  beneficial 
to  himself,  and  reject  the  remainder ;  he  must  take  the  benefit 
to  be  derived  from  the  transaction  cum  onere." 

This  doctrine  is  so  reasonable  and  so  entirely  just  and 
right  in  every  aspect  in  which  it  may  be  considered,  and  it 
has  been  enforced  by  the  courts  with  such  frequency  and  in 
such  a  great  variety  of  circumstances,  that  its  legal  soundness 
cannot  for  a  moment  be  called  in  question. 

It  is  of  no  avail  to  raise  or  discuss  the  question  of  the 
means  of  proof  of  the  agent's  authorit}'.  The  very  essence 
of  the  rule  is,  that  the  agent  had  no  authorit}'  to  make  the 
representation,  condition,  or  stipulation,  by  means  of  which 
he  obtained  the  property,  or  right  of  action,  of  which  the  prin- 
cipal seeks  to  avail  himself.  It  is  not  because  he  had  specific 
authority  to  bind  his  principal  for  the  purpose  in  question 
that  the  principal  is  bound,  but  notwithstanding  the  fact  that 
he  had  no  such  authority.  It  is  the  enjoj'ment  of  the  fruits 
of  the  agent's  action  which  charges  the  principal  with  respon- 
sibility for  his  act.    It  is  useless,  therefore,  to  inquire  whether 


52  AGENCY  BY  RATIFICATION.  [CH.  HI. 

there  is  the  same  degree  of  technical  proof  of  the  authority 
of  the  agent,  in  the  matter  under  consideration,  as  is  required 
in  ordinary  cases  where  an  affirmative  liability  is  set  up 
against  a  principal  by  the  act  of  one  who  assumes  to  be  his 
agent.  There  the  question  is  as  to  the  power  of  the  assumed 
agent  to  impose  a  legal  liability  upon  another  person ;  and, 
in  all  that  class  of  cases,  it  is  entirely  proper  to  hold  that  the 
mere  declarations  of  the  agent  are  not  sufficient  But  in  this 
class  of  cases  the  question  is  entirely  different.  Here  the 
b-.sis  of  liability  for  the  act  or  declaration  of  the  agent,  is 
the  fact  that  the  principal  has  accepted  the  benefits  of  the 
agent's  act  or  declaration.  Where  that  basis  is  made  to 
appear  bj-  testimonj*,  the  legal  consequence  is  established. 
Mr.  Justice  Sharswood,  in  the  case  above  cited,  after  enumer- 
ating many  instances  in  which  the  doctrine  was  enforced, 
sums  up  the  subject  thus :  "  Many  of  these  cases  are  put 
upon  an  implied  authority,  but  the  more  reasonable  ground, 
as  it  seems  to  me,  is  that  the  party  having  enjo}Ted  a  benefit 
must  take  it  cum  onere." 

We  are  of  opinion  that  the  learned  court  below  was  entirely 
right  in  the  treatment  of  this  case. 

Judgment  affirmed  in  each  of  these  cases. 

On  February  8,  1892,  a  motion  for  re-argument  was 
refused. 


§34.]  HYATT  v.   CLARK. 

118  New  York,  563.  —  1890. 

Cross  actions  between  the  same  parties.  Clark's  action 
was  for  specific  performance  of  a  clause  in  a  lease  providing 
for  a  renewal.  Mrs.  Hyatt's  action  was  for  the  cancellation 
of  the  lease,  upon  the  ground  that  her  agent  exceeded  his 
authority  in  making  it.  The  trial  court  found  for  Mrs. 
Hyatt,  but  the  general  term  reversed  the  judgment.  She 
appealed  to  the  Court  of  Appeals. 


§  34.]  HYATT   V.   CLARK.  53 

In  1880,  Mrs.  Hyatt,  while  in  England,  appointed  one 
Lake,  by  written  power  of  attorney,  her  agent  to  manage 
her  business  in  the  United  States,  to  sell  and  convey  her 
property,  to  receive  and  recover  all  moneys  due  her,  and  to 
execute  all  instruments  necessary  to  these  ends.  Lake 
leased  premises  to  Clark ;  but  both  had  doubts  whether  the 
power  of  attorney  authorized  a  lease,  and  the  lease  was 
accepted  subject  to  Mrs.  Hyatt's  approval.  Mrs.  Hyatt 
refused  to  approve,  and  cancelled  the  power  of  attorney. 
Clark,  however,  refused  to  cancel  the  lease,  and  went  into 
possession.  Mrs.  Hyatt  did  not  know  that  Clark  first  re- 
ceived the  lease  conditionally,  but  was  informed  by  Lake  that 
the  lease  was  valid  and  could  not  be  cancelled.  She  there- 
fore received  the  rent  from  Clark  for  the  term  fixed  in  the 
lease,  but  refused  to  renew  it  for  another  term  as  provided 
for  in  the  renewal  clause. 

Vann,  J.  We  do  not  deem  it  important  to  decide  whether 
the  power  of  attorney  authorized  Mr.  Lake  to  execute  the 
lease  in  question  or  not,  because,  in  either  event,  the  same 
result  must  follow,  under  the  circumstances  of  this  case. 

If,  on  the  one  hand,  he  acted  without  adequate  authority 
in  giving  the  lease,  both  the  lessor  and  the  lessee  knew  it, 
for  both  knew  the  facts,  and  both  are  presumed  to  have 
known  the  law,  and  the  former,  at  least,  had  an  absolute 
right  to  disaffirm  the  contract.  As  she  knew  the  contents  of 
the  power  of  attorney  and  the  lease,  and  that  the  latter  was 
executed  by  her  agent  in  her  name,  it  was  not  necessary  that 
she  should  be  informed  of  the  legal  effect  of  those  facts. 
Kelley  v.  Newburyport  &  Amesbury  Horse  M.  JR.  Co., 
141  Mass.  496 ;  Phosphate  Lime  Co.  v.  Green,  L.  R. 
(7  C.  P.)  43 ;  Mechem  on  Agency,  sec.  129. 

Whether  influenced  by  caprice  or  reason,  if  she  had 
promptly  notified  the  lessee  that  she  repudiated  the  lease 
because  her  agent  had  no  power  to  execute  it,  their  rights 
would  have  been  forthwith  terminated,  and  they  would 
have  had  no  lease.  The  right  to  disaffirm  on  one  ten- 
able ground  would,  if  acted  upon,  have  been  as  effective  as 


5-4  AGENCY  BY  RATIFICATION.  [CH.  III. 

the  right  to  disaffirm  upon  all  possible  grounds.  Under  the 
condition  supposed,  the  law  gave  her  the  same  right  to  dis- 
affirm without  any  agreement  to  that  effect,  that  she  would 
have  had  if  her  agent,  being  duly  authorized  to  lease,  had 
expressly  provided,  in  the  written  instrument,  that  she  could 
disaffirm  if  she  chose  to  do  so.  Therefore,  by  accepting  the 
rent  of  the  demised  premises  for  more  than  four  years,  with- 
out protest  or  objection,  she  ratified  the  lease  as  completely 
as  she  could  have,  if  she  had  known  of  two  grounds  upon 
which  to  disaffirm  i  instead  of  only  ""pt  Two  grounds  could 
not  make  the  right  any  more  effectual  than  one.  If  she  had 
the  right  at  all,  the  number  of  grounds  upon  which  she  could 
justify  its  exercise  is  unimportant.  Her  ratification  was 
none  the  less  complete,  because,  being  unwilling  to  run  the 
risk  of  a  doubtful  question  of  law,  she  did  not  at  once  act  as 
she  would  have  acted  if  she  had  known  all  of  the  facts.  As 
said  by  the  court,  in  Adams  v.  Mills,  60  N.  Y.  533,  "  the  law 
holds  that  she  was  hound  to  know  what;  authority  her  agent 
actually  had."  Having  executed  the  power  of  attorney,  she 
is  conclusively  presumed  to  have  known  what  it  meant  and 
the  extent  of  the  authority  that  it  conferred.  (Best  on 
Evidence,  123 ;  Wharton  on  Evi.  §  1241.) 

If  the  lease  was  ultra  vires,  therefore,  by  ratifying  it,  she 
in  legal  effect  executed  and  delivered  it  herself,  and  whatever 
was  saidjbgtween  Lake  and  Clark,  became  immaterial.  Even 
if  they  agreed  that  she  should  have  the  right  to  disapprove,  it 
is  of  no  importance,  because  she  had  that  right  without  any 
such  agreement.  If  her  agent  had  no  power  to  execute  the 
lease,  the  delivery  thereof,  whether  absolute  or  conditional, 
could  not  affect  her  rights.  If  she  was  dissatisfied  with  it, 
she  could  have  been  relieved  of  all  responsibilit}-  thereunder 
by  promptly  saying  to  the  lessee :  "  This  contract  was  not 
authorized  by  the  agency  I  created,  and  I  refuse  to  be 
bound  by  it."  After  that  there  would  have  been  no  lease. 
If  the  action  of  her  agent  was  unauthorized,  it  did  not  bind 
her,  until  by  some  act  of  ratification  she  bound  herself.  By 
ratifying,  she  waived  any  right  to  disaffirm  upon  an}'  ground, 


t 


§  34.]  HYATT  V.   CLAEK.  55 

known  or  unknown,  because  the  lease  did  not  exist,  as  a 
lease,  by  the  act  of  her  agent,  but  by  her  own  act  of 
confirmation. 

If,  on  the  other  hand,  Mr.  Lake  was  duty  authorized  to 
give  the  lease,  certain  presumptions  of  controlling  import- 
ance spring  from  that  fact.  He  is  presumed  to  have  dis- 
closed to  his  principal,  within  a  reasonable  time,  all  of  the 
material  facts  that  came  to  his  knowledge  while  acting  within 
the  scope  of  hia  authority.  £. 

It  is  laid  down  in  Story  on  Agency  (sec.  140),  that! 
"  notice  of  facts  to  an  agent  is  constructive  notice  thereof  to 
the  principal  himself,  where  it  arises  from  or  is  at  the  time 
connected  with  the  subject-matter  of  his  agency,  for,  upon 
general  principles  of  public  policy,  it  is  presumed  that  jthe 
agenthas  communicated  such  facts  to  the  principal,  and  if  he 
hasnot,  still  the  principal,  having  intrusted  the  agent  with 
the  particular  business,  the  other  party  has  a  right  to  deem 
his  acts  and  knowledge  obligatory  upon  the  principal." 

In  other  words,  she  was  chargeable  with  all  the  knowledge 
that  her  agent  had  in  the  transaction  of  the  business  he  had  j 
in  charge.     Ingalls  v.  Morgan,  10  N.  Y.  178;  Adams  v.        > 
Mills,  supra;  Myers  v.  Mutual  life  Ins.  Co.,  99  N.  Y.  1, 
11 ;   Bank  of   U.  S.  v.  Davis,  2   Hill,  451  ;    Higgins  v. 
Armstrong,  9  Col.  38. 

It  was  his  duty  to  keep_her  informed  of  his  acts,  and  to      £^C5 
give  her  timely  notice  of  all  facts  and  cimunsiajices  which        r^js* 
would  have  enabled  her  to  take  any  step  that  she  deemed       lj 
essential  to  her  interests. 

She  does  not  question  the  good  faith  of  Mr.  Lake,  and 
there  is  no  proof  of  fraudulent  collusion  between  him  and 
Mr.  Clark,  who,  while  under  no  obligation  to  inform  Mrs. 
Hyatt  of  the  facts,  had  the  right  to  assume  that  her  agent 
had  done  so.  Ingalls  v.  Morgan,  supra;  Meehan  v. 
Forrester,  52  N.  Y.  277 ;  Scott  v.  Middletown,  U.  &  W.  G. 
B.  B.  Co.,  86  Id.  200. 

It  was  her  duty  to  protect  her  interests  by  selecting  an 
agent  of  adequate  judgment,  experience,  and  integrity,  and 


& 


56  AGENCY  BY  RATIFICATION.  '  [CH.  HI. 

if  she  failed  to  do_sot  she  must  bear_the_loss  resulting  from 
his  inexperience,  negligence,  or  mistaken  zeal.  AftejLihe. 
lapse _of  sufficient,  timp,  t.hprpfnrp,  shp.  fe  presumed  to  have 
acted  with  knowledge  of  all  the  acts  of  her  agent,  in  the 
line  of  his  agency_ 

Bj-  accepting  and  retaining  the  rent,  which  was  the  fruit  of 
her  agent's  act,  for  nearly  five  years  without  objection,  she  is 
presumed  to  have  ratified  that  act.  Hoyt  v.  Thompson, 
19  N.  Y.  207 ;  Alexander  v.  Jones,  64  Iowa,  207  ;  Heyn  v. 
VHagen,  60  Mich.  150  ;  2  Greenl.  on  Ev.  §§  66,  67.  With- 
out expressing  any  dissatisfaction  to  the  lessees,  she  received 
eighteen  quarterly  payments  of  rent  before  electing  to  avoid 
the  lease.  She  made  no  offer  to  return  an}'  part  of  the  rent 
so  paid,  although  she  tendered  back  the  amount  deposited 
to  her  credit  for  the  nineteenth  quarter  at  the  time  that  she 
demanded  possession  of  the  premises. 

Independent  of  what  she  is  presumed  to  have  known 
through  the  information  of  her  agent,  she  in  fact  knew  the 
terms  of  the  lease,  and  that  it  was  executed  by  Mr.  Lake  in 
her  name. 

Upon  her  arrival  in  this  country  in  September,  1880,  she 
visited  the  premises  and  saw  the  additions  and  improvements 
that  the  tenants  were  making  thereto,  and  at  that  time,  as 
well  as  subsequently,  rent  was  paid  to  her  in  person. 
Apparently  she  had  all  the  knowledge  that  she  cared  to 
have,  for  she  made  no  inquiry  of  her  agent  until  about  six 
months  previous  to  the  expiration  of  the  first  term  of  five 
years,  and  not  until  after  the  lessees  had  given  notice  of 
their  election  to  continue  the  lease  for  a  second  term. 
Thinking  that  the  rent  was  low,  she  then  tried  to  find  out 
something  from  her  agent  that  would  enable  her  to  avoid  the 
lease,  and,  as  a  result  of  her  efforts  in  this  direction,  ascer- 
tained the  fact  upon  which  she  based  her  right  to  succeed  in 
this  litigation.  But  it  was  then  too  late  for  her  to  disaffirm, 
because  her  long  silence,  and  many  acts  of  ratification,  had 
been  relied  upon  by  the  tenants,  who  had  expended  a  large 
sum  of  money  in  making  permanent  improvements  on  the 


§  35.]        PHILADELPHIA,  W.  &  B.  E.  CO.  V.  COWELL.       57 

property.  Having  received  the  benefits  of  the  contract,  she 
could  not,  after  years  of  acquiescence,  suddenty  invoke 
the  aid  of  the  courts  to  relieve  her  of  any  further  obligation, 
because  she  had  but  recently  discovered  a  fact  that  she 
should  have  ascertained,  and  which  the  law  presumes  she 
did  ascertain,  long  before.  1  Am.  &  Eng.  Enc}rc.  of 
Law,  429. 

We  think  that  after  ample  opportunity  for  election  and 
action,  she  ratified  the  lease,  and  that  her  ratification  was 
irrevocable. 

In  each  action  the  order  appealed  from  should  be  affirmed, 
and  judgment  directed  upon  the  stipulation  in  favor  of  the 
respondent,  with  costs  of  appeal  to  this  court  in  one  action 
only. 


3.  Silence  may  amount  to  ratification. 

§  35.]    PHILADELPHIA,  W.   &  B.  RAILROAD  CO. 
v.  COWELL. 

28  Pennsylvania  State,  329.  —  1857. 

Action  by  Cowell  to  recover  the  sum  of  $1,700  dividends 
on  stock.  Defence,  the  authorized  application  of  the  divi- 
dends to  the  payment  of  additional  stock  subscription. 
Verdict  and  judgment  for   plaintiff.     Defendant  appeals. 

The  subscription  for  additional  stock  was  made  in  plain- 
tiff's behalf  bj'  one  Fisher,  who  promptly  informed  plaintiff 
of  what  he  had  done.  Plaintiff  remained  silent  for  about 
seven  years  after  receiving  this  information.  Fisher  had 
previously  corresponded  with  plaintiff  as  to  the  condition  of 
the  company,  and  had  consulted  with  plaintiffs  friends  in 
this  countoy,  but  he  had  no  authority  to  act  for  plaintiff. 
The  court  rejected  the  evidence  offered  to  prove  these  facts. 

Woodward,  J.  The  question  presented  by  the  first  error 
assigned,  is  not  whether  the  evidence  offered  and  rejected 


58  AGENCY  BY  RATIFICATION.  [CH.  Til. 

proved    the   plaintiff's  ratification  of  Fisher's  subscription ; 
but  whether  it  tended  to  prove  it. 

Suppose  the  court  had  admitted  the  evidence,  and  the 
jury  had  found  the  plaintiffs  assent  and  ratification,  could 
he  have  expected  us  to  reverse  the  judgment  on  the  ground 
that  a  question  of  fact  had  been  submitted  and  found  without 
any  evidence? 

Could  it  have  been  said  that  the  facts  set  down  in  the  bill 
of  exception,  full}-  proved,  were  no  evidence  of  ratification  ; 
that  they  were  so  entirely  irrelevant  as  to  be  unworthy  of 
consideration  by  rational  minds  in  connection  with  such  a 
question ;  that  that  question  stood  just  as  far  from  demon- 
stration after  such  evidence  as  before? 

Unless  this  could  have  been  said,  and  must  have  been 
said  in  the  event  supposed,  the  judgment  now  before  us 
must  be  reversed ;  for  the  question  here  is,  in  essence  and 
substance,  exactly  the  same  as  it  would  have  been  then. 

If  this  evidence  might  have  satisfied  the  jury ;  that  is,  if 
it  were  of  a  quality  to  persuade  reasonable  men  that  Cowell 
did  assent  to  Fisher's  assumed  agency  after  he  had  full 
knowledge  of  what  had  been  done,  it  should  have  been 
admitted.  The  question  in  the  cause  was  for  the  jury,  and 
not  the  court.  But  the  fact  to  be  inquired  for,  like  all 
mental  conditions  and  operations,  could  be  established  only 
inferential!}-.  We  judge  of  the  mind  and  will  of  a  pai'ty 
only  from  his  conduct,  and  if  he  have  done  or  omitted  noth- 
ing which  may  fairly  be  interpreted  as  indicative  of  the 
mental  purpose,  there  is  indeed  no  evidence  of  it  for  either 
court  or  jury ;  but  if  his  conduct,  in  given  circumstances, 
affords  any  ground  for  presumption  in  respect  to  the  mental 
purpose,  it  is  for  a  jury  to  define,  limit,  and  apply  the 
presumption. 

The  most  material  circumstance  in  the  offer  was  the  silence 
of  Mr.  Cowell.  Fully  informed  about  the  last  of  the  year 
1848  as  to  what  had  been  done  in  his  name,  and  the  motives 
and  reasons  for  doing  it,  he  did  not  condescend  to  reply  for 
nearly  seven  years.    It  is  insisted  that  this  fact,  even  when 


§  35.]       PHILADELPHIA,  W.  &  B.  E.  CO.  V.  COWELL.       59 

taken  in  connection  with  the  other  circumstances  in  the 
offer,  was  no  evidence  of  his  intention  to  assent  to  the  new 
subscription. 

The  argument  admits  that  where  the  relation  of  principal 
and  agent  has  once  existed,  or  where  the  property  of  a 
principal  has  with  his  consent  come  into  the  hands  and  pos- 
session of  a  third  party,  the  principal  is  bound  to  give  notice 
that  he  will  not  sanction  the  unauthorized  acts  of  the  agent, 
performed  in  good  faith  and  for  his  benefit ;  but  it  is  said, 
and  truly,  that  Mr.  Fisher  had  never  been  an  authorized 
agent  of  the  plaintiff  for  an\*  purpose,  and  that  the  plaintiffs 
property  had  never  been  intrusted  to  him.  It  is  on  this 
distinction  that  the  learned  counsel  sets  aside  the  case  of  the 
Kentucky  Bank  v.  Combs,  7  Barr,  543,  and  indeed  all  of 
the  authorities  relied  on  by  the  defendant. 

I  do  not  understand  counsel  to  mean  that  there  can  be  no 
valid  ratification  unless  one  of  the  conditions  specified  — 
either  prior  agency  or  possession  of  principal's  property  — 
has  existed,  but  that  silence,  after  knowledge  of  the  act 
done,  is  evidence  of  ratification  only  in  such  cases.  It  must 
be  admitted  that  the  act  of  a  mere  stranger  or  volunteer  is 
capable  of  ratification,  for  all  the  authorities  are  so;  but  the 
argument  is  that  the  silence  of  the  party  to  be  affected,  what- 
ever the  attending  circumstances,  cannot  amount  to  ratifica- 
tion of  the  act  of  a  stranger. 

In  Wilson  v.  Tumman,  6  M.  &  G.  236,  C.  J.  Tindall,  on 
the  authorit}-  of  several  old  cases,  considered  that  the  effect 
of  a  ratification  was  dependent  on  the  question  whether  the 
person  assuming  to  act  had  acted  for  another  and  not  for 
himself.  The  act,  it  would  seem,  cannot  be  ratified  unless 
it  were  done  in  the  name  of  the  person  ratifying.  Jtatum 
quis  habere  non  potest,  quod  ipsius  nomine  non  est  gestum. 
And  the  general  rule  is  thus  expressed  in  the  Digest,  50 : 
/Si  quis  ratum  habuerit  quod  gestum  est,  obstringitur  man- 
dati  actione. 

If,  then,  the  principle  of  law  be  that  I  can  ratify  that  only 
which  is  done  in  my  name,  but  when  I  have  ratified  what* 


60  AGENCY  BY  KATIFICATION.  [CH.  III. 

ever  is  done  in  mjT  name,  I  am  bound  for  it  as  by  the  act  of 
an  authorized  agent,  it  is  apparent  that  m}r  silence,  in  view 
of  what  has  been  done,  is  to  be  regarded  simply  as  evidence 
of  ratification,  more  or  less  expressive,  according  to  the  cir- 
cumstances in  which  it  occurs.  It  is  not  ratification  of  itself, 
but  only  evidence  of  it,  to  go  to  the  jury  along  with  all  the 
circumstances  that  stand  in  immediate  connection  with  it. 
Among  these  the  prior  relations  of  the  parties  are  ver}r  im- 
portant. If  the  party  to  be  charged  had  been  accustomed 
to  contract  through  the  agency  of  the  individual  assuming  to 
act  for  him,  or  had  intrusted  property  to  his  keeping,  or  if 
he  were  a  child  or  servant,  partner  or  factor,  the  relation, 
conjunctionis  favor,  would  make  silence  strong  evidence 
of  assent. 

On  the  other  hand,  if  there  had  been  no  former  agency, 
and  no  peculiarity  whatever,  in  the  prior  relations  of  the 
parties,  silence  —  a  refusal  to  respond  to  a  mere  impertinent 
interference  —  would  be  a  very  inconclusive,  but  not  an  abso- 
lutely irrelevant  circumstance.  The  man  who  will  not  speak 
when  he  sees  his  interests  affected  by  another,  must  be  con- 
tent to  let  a  jury  interpret  his  silence. 

It  is  a  clear  principle  of  equitjT  that  where  a  man  stands 
by  knowingl}-,  and  suffers  another  person  to  do  acts  in  his 
own  name  without  any  opposition  or  objection,  he  is  pre- 
sumed to  have  given  authority  to  do  those  acts.  /Semper, 
qui  non  prohibet  pro  se  intervenire,  mandare  creditur : 
Story's  Agency,  §  89. 

We  do  not  apply  the  full  strength  of  this  principle  when 
we  rule  that  the  plaintiffs  silence,  in  connection  with  the 
circumstances  offered,  was  evidence  fit  for  the  consideration 
of  a  jury  on  the  question  of  ratification.  If  mental  assent 
ma}'  be  inferred  from  circumstances,  silence  may  indicate  it 
as  well  as  words  or  deeds.  To  sa}r  that  silence  is  no  evidence 
of  it,  is  to  saj'  that  there  can  be  no  implied  ratification  of  an 
unauthorized  act,  or  at  the  least  to  tie  up  the  possibility  of 
ratification  to  the  accident  of  prior  relations.  Neither  reason 
nor  authority  justifies  such  a  conclusion.    A  man  who  sees 


§  35.]       PHILADELPHIA,  W.  &  B.  K.  CO.  V.  CO  WELL.       61 

what  has  been  done  in  his  name  and  for  his  benefit,  even  by 
an  intermeddler,  has  the  same  power  to  ratify  and  confirm  it 
that  he  would  have  to  make  a  similar  contract  for  himself; 
and  if  the  power  to  ratify  be  conceded  to  him,  the  fact  of 
ratification  must  be  provable  by  the  ordinary  means. 

For  these  reasons,  the  distinction  on  which  the  argument 
for  the  defendant  in  error  rests  seems  to  us  to  be  too  narrow. 

The  prior  relations  of  the  parties  lend  great  importance  to 
the  fact  of  silence ;  but  it  is  a  mistake  to  make  the  compe- 
tency of  the  fact  dependent  on  those  relations.  I  am  aware 
that  Livermore  cites  with  approbation,  p.  50,  the  opinion  of 
civil  law  writers,  that  where  a  volunteer  has  officiously 
interfered  in  the  affairs  of  another  person,  and  made  a 
contract  for  him  without  any  color  of  authorit}',  such  other 
person  is  not  bound  to  answer  a  letter  from  the  intermeddler, 
informing  him  of  the  contract  made  in  his  name,  nor  is  his 
silence  to  be  construed  into  ratification.  But  it  is  to  be 
remembered  that  such  writers  are  not  laying  down  a  rule  of 
evidence  to  govern  trials  by  jury,  but  are  declaring  rather 
the  effect  upon  the  judicial  mind  of  the  party's  silence.  It 
is  one  thing  to  say  that  the  law  will  not  imply  a  ratification 
from  silence,  and  a  very  different  thing  to  say  that  silence 
is  a  circumstance  from  which,  with  others,  a  jury  may  imply 
it.  Because  evidence  does  not  raise  a  presumption  so  vio- 
lent as  to  force  itself  upon  the  judge  as  a  conclusion  of  law, 
is  the  evidence  therefore  incompetent  to  go  to  a  jury  as 
ground  for  a  conclusion  of  fact?  No  writer,  with  a  common 
law  jury  before  his  eyes,  has  ever  maintained  the  affirmative 
of  this  proposition.  If  it  could  be  established  it  would 
abolish  that  institution  entirety,  and  refer  every  question 
and  all  evidence  to  the  judicial  conscience. 

But  it  is  time  now  to  remark  that  this  case  is  far  from 
being  that  of  a  mere  volunteer  or  intermeddler.  True  it  is  that 
Mr.  Fisher  had  not  anj'  proper  authority  to  make  the  new 
subscription,  but  Messrs.  Binney  and  Biddle,  the  friends  and 
correspondents  of  the  plaintiff,  had  consulted  him  in  reference 
to  the  plaintiff's  interests  in  this  railroad  company,  and  as  a 


62  AGENCY  BY  RATIFICATION.  [CH.  m. 

director  of  the  company  he  stood  in  some  sort  as  a  represen- 
tative and  trustee  of  the  plaintiff,  who  was  in  a  foreigu  coun- 
try, and  without  any  authorized  agent  here.  The  proposition 
that  everjT  stockholder  should  subscribe  new  stock  to  the 
extent  of  ten  per  cent,  was  designed,  and  as  the  event  proved, 
was  well  designed,  to  retrieve  the  fortunes  of  the  company  ; 
but  it  was  necessar}'  to  its  success  that  every  stockholder 
should  come  into  the  arrangement.  The  emergency  was 
pressing,  and  Mr.  Fisher,  manifestly  acting  in  perfect  good 
faith,  made  the  subscription  for  the  plaintiff,  which  he  be- 
lieved the  plaintiff  would  not  hesitate  to  make  if  personally 
present. 

When  the  plaintiff  was  fully  informed  that  a  sagacious 
financier,  to  whom  his  chosen  friends  and  correspondents  had 
referred  his  interests,  and  who  stood  in  the  fiduciary  relation 
of  a  director,  had  pledged  him  for  a  new  subscription,  which 
circumstances  seemed  to  justify  and  demand,  I  say  not  that 
he  was  bound  by  it,  nor  even  that  he  was  bound  to  repudiate 
it,  but  that  his  delay  for  near  seven  jears,  either  to  approve 
or  repudiate,  was  a  fact  fit  to  be  considered  by  a  jury  on  the 
question  of  ratification.  The  subscription  was  made  in  the 
plaintiff's  name,  and  accepted  by  the  company  as  his ;  and  it 
does  not  appear  that  the}'  knew  Fisher  was  acting  without 
authorit}'.  The  offer  was  to  show  that  it  was  highly  bene- 
ficial to  the  plaintiff.  It  was,  then,  such  an  act  as  is  capable 
in  law  of  being  ratified.  The  plaintiff  might  make  it  his  own 
by  adoption.  Did  he  adopt  it?  He  did,  if  he  ever  gave  it 
mental  assent.  How  could  the  company  show  assent  by 
anything  short  of  a  written  agreement,  if  not  by  evidence  of 
the  nature  of  that  in  the  bill  of  exception?  The  medium  of 
proof,  where  a  mental  purpose  is  the  object  of  inquiry,  must 
conform  to  the  mode  of  manifestation.  To  say  that  you  may 
prove  assent,  but  may  not  give  the  circumstances  in  evi- 
dence from  which  it  is  to  be  implied,  is  to  say  nothing. 

Strongly  persuasive  as  we  consider  the  offered  evidence, 
we  do  not  put  our  judgment  so  much  upon  the  strength  as 
upon  the  nature  of  it.     We  think  it  was  calculated  to  con- 


§  36.]  EBEKTS   V.   SELOVER.  63 

vince  a  jury  that  the  plaintiff  did  indeed  assent  to  and  ap- 
prove of  what  Mr.  Fisher  had  done  in  his  behalf,  and  therefore 
it  should  have  been  received  and  submitted. 

If  they  should  find  from  it  the  assent  and  ratification  of  the 
plaintiff,  the  subscription  became,  as  between  him  and  the 
company,  a  valid  contract,  aud  on  his  failure  to  pay  the  in- 
stalments, the  company  had  a  right  to  apply  thereto  the 
accruing  dividends  on  his  old  stock. 

When  he  pays  what  remains  unpaid  on  the  instalments,  he 
will  be  entitled  to  his  certificates  of  stock. 

The  defence  under  the  Statute  of  Limitations  was  not  well 
taken.  It  majr  be  well  doubted  whether,  under  our  Acts  of 
Assembly,  any  incorporated  company  can  set  up  the  Statute 
of  Limitations  against  a  stockholder's  dividends.  It  certainly 
cannot  be  done  until  after  a  demand  and  refusal,  or  notice  to 
a  shareholder  that  his  right  to  dividends  is  denied.  But  here, 
so  far  from  such  notice  having  been  given,  the  company 
recognize  the  plaintiff's  right  to  the  dividends,  and  claim  to 
have  applied  them  to  his  use.  The  statute  can  have  no  place 
in  such  a  defence. 

The  judgment  is  reversed  and  a  venire  de  novo  awarded. 


4.    Assent  must  be  in  toto  and  unconditional. 

§  36.]  EBERTS   v.   SELOVER. 

44  Michigan,  519.  — 1880. 

Assumpsit  to  recover  ten  dollars  as  subscription  price  of  a 
book.  Defendant  tenders  $4.27.  Judgment  for  defendant. 
Plaintiffs  bring  error. 

Cooley,  J.  This  is  an  action  brought  to  recover  the 
subscription  price  of  a  local  history.  The  subscription 
was  obtained  by  an  agent  of  the  plaintiffs,  and  defendant 
signed  his  name  to  a  promise  to  pay  ten  dollars  on  the  de- 
livery of  the  book.    This  promise  was  printed  in  a  little  book, 


64  AGENCY  BY  KATIFICATION.  [CH.  m. 

made  use  of  for  the  purpose  of  obtaining  such  subscriptions, 
and  on  the  opposite  page,  in  sight  of  one  signing,  was  a  refer- 
ence to  "  rules  to  agents,"  printed  on  the  first  page  of  the 
book.  One  of  these  rules  was  that  u  no  promise  or  statement 
made  by  an  agent  which  interferes  with  the  intent  of  printed 
contract  shall  be  valid,"  and  patrons  were  warned  under  no 
circumstances  to  permit  themselves  to  be  persuaded  into 
signing  the  subscription  unless  they  expected  to  pa}'  the  price 
charged.  From  the  evidence,  it  appears  that  when  Schenck, 
the  agent,  solicited  his  subscription,  the  defendant  was  not 
inclined  to  give  it,  but  finally  told  the  agent  he  would  take  it 
provided  his  fees  in  the  office  of  justice,  then  held  b}T  him, 
which  should  accrue  from  that  time  to  the  time  of  delivery 
of  the  book  should  be  received  as  an  equivalent.  The  agent 
assented,  and  defendant  signed  the  subscription,  receiving  at 
the  same  time  from  the  agent  the  following  paper :  — 

Cold  water,  April  29,  1878. 
Mr.  Isaac  M.  Selover  gives  his  order  for  one  copy  of  our 
history,  for  which  he  agrees  to  pay  on  delivery  all  the  pro- 
ceeds of  his  office  as  justice  from  now  till  the  delivery  of  said 
history. 

Eberts  &  Abbott,  per  Schenck. 

The  plaintiffs  claim  that  the  history  was  duly  delivered, 
and  they  demand  the  subscription  price,  repudiating  the 
undertaking  of  the  agent  to  receive  anything  else,  as  being  in 
excess  of  his  authority,  and  void.  The  defendant  relies  on 
that  undertaking,  and  has  brought  into  court  $4.27  as  the 
amount  of  his  fees  as  justice  for  the  period  named.  This 
statement  of  facts  presents  the  questions  at  issue  so  far  as 
they  concern  the  merits. 

It  may  be  perfectly  true,  as  the  plaintiffs  insist,  that  this 
undertaking  of  the  agent  was  in  excess  of  his  authorit}' ;  that 
the  defendant  was  fairly  notified  by  the  entries  in  the  book 
of  that  fact,  and  that  consequently  the  plaintiffs  were  not 
bound  by  it,  unless  the}'  subsequently  ratified  it.  Unfortu- 
nately for  their  case,  the  determination  that  the  act  of  the 


§  36.]  EBERTS   V.   SELOVER.  65 

agent  in  giving  this  paper  was  void  does  not  by  any  means 
settle  the  fact  of  defendant's  liability  upon  the  subscription. 

The  plaintiffs'  case  requires  that  the}-  shall  make  out  a 
contract  for  the  purchase  of  their  book.  To  do  this,  it  is  es- 
sential that  they  show  that  the  minds  of  the  parties  met  on 
some  distinct  and  definite  terms.  The  subscription  standing 
alone  shows  this,  for  it  shows,  apparently,  that  defendant 
agreed  to  take  the  book  and  pay  therefor  on  delivery  the 
sum  of  ten  dollars.  But  the  contemporaneous  paper  given 
back  b}r  the  agent  constitutes  a  part  of  the  same  contract, 
and  the  two  must  be  taken  and  considered  together. 
Bronson  v.  Green,  Walk.  Ch.  56 ;  Dudgeon  v.  Haggart,  17 
Mich.  273.  Taking  the  two  together  it  appears  that  the  de- 
fendant never  assented  to  any  purchase  except  upon  the 
terms  that  the  plaintiffs  should  accept  his  justice's  fees  for 
the  period  named  in  full  pa3'ment  for  the  book.  If  this  part 
of  the  agreement  is  void,  the  whole  falls  to  the  ground,  for 
defendant  has  assented  to  none  of  which  this  is  not  a  part 
When  plaintiffs  discovered  what  their  agent  had  done,  two 
courses  were  open  to  them :  to  ratify  his  contract,  or  to 
repudiate  it.  If  they  ratified  it,  they  must  accept  what  he 
agreed  to  take.  If  they  repudiated  it,  the}'  must  decline  to 
deliver  the  book  under  it.  But  they  cannot  ratify  so  far  as 
it  favors  them,  and  repudiate  so  far  as  it  does  not  accord  with 
their  interests.  They  must  deal  with  the  defendant's  under- 
taking as  a  whole,  and  cannot  make  a  new  contract  by  a 
selection  of  stipulations  to  which  separately  he  has  never 
assented. 

The  judgment  must  be  affirmed  with  costs.1 

1  See  also  Wheeler  Sp  Wilson  Mfg.  Co.  v.  Aughey,  ante,  p.  50. 


66  AGENCY  BY  RATIFICATION.  [CH.  ILL 


5.  Assent  must  be  free  from  mistake  or  fraud. 

§  37.]      TRUSTEES,   &c,  OF  EASTHAMPTON 
v.  BOWMAN. 

136  New  York,  521.  — 1893. 

Action  to  set  aside  a  deed  purporting  to  be  given  by  the 
Trustees,  &c,  of  Easthampton,  through  one  Dominy,  to  the 
defendant.     Judgment  for  plaintiff.     Defendant  appeals. 

Earl,  J.  (after  deciding  that  the  deed  was  unauthorized). 
But  the  main  defence  relied  upon  by  the  defendant  at  the 
trial,  and  now  relied  upon,  grows  out  of  the  facts  now  to  be 
stated.  The  defendant  paid  Dominy  for  the  land  $200, 
which  he  kept  and  appropriated  to  his  own  use.  In  August, 
1884,  the  trustees  of  the  town  then  in  office  commenced  a 
suit  against  the  persons  who  were  trustees  during  the  year  in 
which  the  deed  to  the  defendant  was  given,  to  compel  them 
to  account  for  and  paj*  over  certain  moneys  belonging  to  the 
town,  and  in  that  action,  among  other  claims  made  against 
Dominy  as  a  defendant  therein,  the  plaintiff  claimed  to  re- 
cover the  $200,  paid  to  him  by  the  defendant.  That  action 
was  tried  and  proceeded  to  judgment,  and  the  plaintiff,  among 
other  things,  recovered  judgment  against  Domin}-  for  that 
$200,  and  execution  upon  that  judgment  was  issued  against 
him  and  returned  unsatisfied.  Thus  the  town  has  failed  to 
collect  or  receive  the  money  paid  to  Dominy  b}'  the  defend- 
ant for  the  land.  The  claim  on  the  part  of  the  defendant  is 
that  the  plaintiff  in  that  action  proceeded  to  judgment  and 
execution,  knowing  that  the  deed  was  executed  without 
authority,  and  that  the  money  was  received  by  Dominy  with- 
out authority,  and  that  thus  it  ratified  Dominy's  unauthorized 
act,  and  became  bound  thereby.  It  is  quite  true  that  the 
trustees  acting  for  the  town,  and  clothed  with  authority  to 
convey  these  lands,  could  ratifj  the  unauthorized  conveyance 
which  had  already  been  made  to  the  defendant,  and  that  the 
town  could  be  bound  by  their  ratification.     But  before  a  prin~ 


§  37.]      TRUSTEES   OF   EASTHAMPTON  V.  BOWMAN.       67 

cipal  can  be  held  to  have  ratified  the  unauthorized  act  of  an 
assumed  agent  he  must  have  full  knowledge  of  the  facts,  so 
that  it  can  be  said  that  he  intended  to  ratify  the  act.  If  his 
knowledge  is  partial  or  imperfect  he  will  not  be  held  to  have 
ratified  the  unauthorized  act,  and  the  proof  of  adequate 
knowledge  of  the  facts  should  be  reasonably  clear  and  cer- 
tain, particularly  in  a  case  like  this,  where,  so  far  as  the 
record  discloses,  no  substantial  harm  has  come  to  the  defend- 
ant from  the  delay  or  the  acts  of  the  principal.  In  this  case 
it  is  found,  and  appears  from  the  evidence  clearly,  that  the 
trustees  who  brought  the  action  against  Dominy  and  others 
for  the  accounting,  had  at  and  before  the  commencement  of 
the  action  no  knowledge  whatever  of  the  fraud  perpetrated 
upon  the  town  by  the  unauthorized  execution  of  the  deed. 
During  the  progress  of  the  trial  of  that  action,  however, 
there  was  some  evidence  tending  to  show  the  unauthorized 
execution  of  the  deed  by  Dominy ;  but  the  proof  was  given 
bj-  the  defendants,  who  were  resisting  pajTment  to  the  plain- 
tiff in  that  action,  and,  as  the  trial  judge  found,  the  trustees 
of  the  town  did  not  believe  that  evidence  thus  given  b\-  the 
parties  sued  in  their  defence  to  that  action,  and  it  is  found 
that  the}*  proceeded  to  judgment  and  execution  in  ignorance 
of  the  fraud  which  had  been  perpetrated  b}-  Dominy  upon 
the  town.  We  do  not,  therefore,  think  that  the  ratification 
on  the  part  of  the  town  by  its  trustees  was  so  clearly  and 
unequivocally  established  that  we  would  be  authorized  to 
reverse  this  judgment.  Before  a  municipal  corporation  can 
be  held  to  have  ratified  the  unauthorized  act  of  its  officers  or 
assumed  agents,  the  rule  should  be  strictly  enforced  that  the 
facts  constituting  the  ratification  should  be  fully  and  clearly 
proved,  so  that  it  can  fairly  be  said  that  there  was  an  inten- 
tion to  confirm  the  unauthorized  act  and  receive  the  fruits 
thereof.     Here  there  is  no  conclusive  proof  to  that  effect. 

But  as  the  plaintiff  now  holds  a  judgment  against  Dominy 
in  which  the  $200  paid  to  him  by  the  defendant  is  included, 
we  think  that  as  a  condition  of  relief  in  this  action  it  should 
be  required  to  assign  so  much  of  that  judgment  as  relates  to 
the  $200  to  the  defendant 


68  AGENCY  BY   RATIFICATION.  [CH.  in. 

Our  conclusion,  therefore,  is  that  the  judgment  entered  at 
the  Special  Term  should  be  so  far  modified  as  to  require  the 
plaintiff  to  assign  to  the  defendant  so  much  of  the  judgment 
recovered  by  it  against  Dominy  as  represents  the  $200  paid 
bj-  the  defendant  to  him,  and  as  thus  modified  it  should  be 
affirmed,  with  costs. 

All  concur.  Judgment  accordingly.1 


§37.]  COMBS  v.    SCOTT  et  al. 

12  Allen  (Mass.),  493.  —  1866. 

Contract,  for  compensation  agreed  to  be  paid  plaintiff 
for  his  services  in  procuring  two  recruits  as  a  part  of  the 
quota  of  the  town  of  Hawley.  Verdict  for  plaintiff.  De- 
fendants allege  exceptions. 

The  court  charged  that,  as  to  ratification,  "  if  there  was 
a  material  mistake,  it  makes  no  difference  how  it  arose,  or 
whether  defendants  might  have  ascertained  the  contrary  to  be 
true,  unless  it  arose  from  the  negligence  of  the  defendants." 

Bigelow,  C.  J.  (after  deciding  that  the  services  were  not 
illegal).  But,  upon  another  point,  we  are  of  opinion  that 
the  exceptions  of  the  defendants  are  well  taken.  In  instruct- 
ing the  jury  on  the  question  of  ratification  by  the  defendants 
of  the  contract  alleged  to  have  been  made  by  their  agent  in 
excess  of  the  authority  granted  to  him,  the  judge  in  effect 
told  the  jury  that  such  ratification  would  be  binding  on  the 
defendants,  though  made  under  a  material  misapprehension 
of  facts,  if  such  misapprehension  arose  from  the  negligence 
or  omission  of  the  defendants  to  make  inquiries  relative  to 
the  subject-matter.  In  the  broad  and  general  form  in  which 
this  instruction  was  given,  we  are  of  opinion  that  it  did  not 
correctly  state  the  rule  of  law,  and  that  the  jury  may  have 
been  misled  by  it  in  the  consideration  of  this  part  of  the 
case. 

1  Compare  Hyatt  v.  Clark,  118  N.  Y.  563,  ante,  p.  52. 


§  37.]  COMBS  V.   SCOTT.  69 

The  general  rule  is  perfectly  well  settled,  that  a  ratification 
of  the  unauthorized  acts  of  an  agent,  in  order  to  be  effectual 
and  binding  on  the  principal,  must  have  been  made  with  a 
full  knowledge  of  all  material  facts,  and  that  ignorance,  mis- 
take  or  misapprehension  of  any  of  the  essential  circumstances 
relating  to  the  particular  transaction  alleged  to  have  been 
ratified,  will  absolve  the  principal  from  all  liability  by  reason 
of  any  supposed  adoption  of  or  assent  to  the  previously  un- 
authorized acts  of  an  agent.  We  know  of  no  qualification 
of  this  rule  such  as  was  engrafted  upon  it  in  the  instructions 
given  to  the  jurj7  in  the  present  case.  Nor,  after  consider- 
able research,  have  we  been  able  to  find  that  such  qualification 
has  ever  been  recognized  in  any  approved  text-writer  or  ad- 
judicated case.  And,  upon  consideration,  it  seems  to  us  to 
be  inconsistent  with  sound  principle. 

Ratification  of  a  past  and  completed  transaction,  into 
which  an  agent  has  entered  without  authorUy,  is  a  purely 
voluntarj7  act  on  the  part  of  a  principal.  No  legal  obligation 
rests  upon  him  to  sanction  or  adopt  it.  No  duty  requires 
him  to  make  inquiries  concerning  it.  Where  there  is  no  legal 
obligation  or  duty  to  do  an  act,  there  can  be  no  negligence  in 
an  omission  to  perform  it.  The  true  doctrine  is  well  stated 
by  a  learned  text- writer :  "  If  I  make  a  contract  in  the  name 
of  a  person  who  has  not  given  me  an  authority,  he  will  be 
under  no  obligation  to  ratify  it,  nor  will  he  be  bound  to  the 
performance  of  it."  1  Livermore  on  Agency,  44 ;  see  also 
Paley  on  Agency,  171,  note  o.  Whoever,  therefore,  seeks  to 
procure  and  rely  on  a  ratification  is  bound  to  show  that  it 
was  made  under  such  circumstances  as  in  law  to  be  binding 
on  the  principal,  especially  to  see  to  it  that  all  material  facts 
were  made  known  to  him.  The  burden  of  making  inquiries 
and  of  ascertaining  the  truth  is  not  cast  on  him  who  is  under 
no  legal  obligation  to  assume  a  responsibility,  but  rests  on  the 
party  who  is  endeavoring  to  obtain  a  benefit  or  advantage 
for  himself.  This  is  not  only  just,  but  it  is  practicable.  The 
needful  information  or  knowledge  is  always  within  the  reach 
of  him  who  is  either  part}'  or  privy  to  a  transaction  which  he 


70  AGENCY  BY  RATIFICATION.  [CH.  HL 

seeks  to  have  ratified,  rather  than  of  him  who  did  not  author- 
ize it,  and  to  the  details  of  which  he  may  be  a  stranger. 

We  do  not  mean  to  say  that  a  person  can  be  wilfully 
ignorant,  or  purposely  shut  his  eyes  to  means  of  information 
within  his  own  possession  and  control,  and  thereby  escape 
the  consequences  of  a  ratification  of  unauthorized  acts  into 
which  he  has  deliberately  entered  ;  but,  our  opinion  is,  that 
rati  fixation  of  an  antecedent  act  of  an  agent  which  was  unau- 
thorized cannot  be  held  vajjd  and  binding,  where  the  person 
sought  to  be  charged  has  misapprehended  or  mistaken  mate- 
rial  facts,  although  he  may  have  wholly  omitted  to  make 
inquiries  of  other  persons  concerning  them,  and  his  ignorance 
and  misapprehension  might  have  been  enlightened  and  cor- 
rected by  the  use  of  diligence  onjris  part  to  ascertain  them. 
The  mistake  at  the  trial  consisted  in  the  assumption  that  any 
such  diligence  was  required  of  the  defendants.  On  this 
point,  the  instructions  were  stated  in  a  manner  which  may 
have  led  the  jury  to  misunderstand  the  rights  and  obligations 
of  the  parties.  Exceptions  sustained. 


§  37.]     KELLEY  v.   NEWBURYPORT    HORSE 
RAILROAD    CO. 

141  Massachusetts,  496.  —  1886. 

Contract,  upon  certain  promissory  notes  alleged  to  have 
been  made  by  defendant  corporation  to  K.  and  B.,  or  order, 
and  indorsed  to  plaintiff.  Verdict  for  plaintiff.  Defendant 
alleges  exceptions. 

C.  Allen,  J.  (after  disposing  of  another  point).  The 
defendant  then  contends  that  the  notes  in  suit  cannot  be 
enforced,  because  they  were  given  to  its  own  directors  in  pay- 
ment for  the  construction  of  the  road  by  them,  and  are  now 
held  by  the  plaintiff  subject  to  all  defences  which  might  have 
been  made  to  a  suit  upon  them  by  the  payees.  Upon  this 
point,  the  only  question  properly  before  us  is,  whether  there 


§  37.]      KELLEY  V.  NEWBUEYPOET  HOKSE  K.  E.  CO.       71 

■was  sufficient  evidence  to  warrant  the  jury  in  finding  a  ratifi- 
cation of  the  notes  by  the  corporation.  The  presiding  judge 
assumed  that  the  notes  were  originally  void,  and  submitted  to 
the  jury  the  single  question  of  ratification.  Being  of  opinion 
that  there  was  sufficient  evidence  to  warrant  the  verdict  on 
the  question  of  ratification,  we  have  no  occasion  to  consider 
whether  it  might  not  also  have  been  proper  to  submit  to  the 
juiy,  under  proper  instructions,  the  question  of  the  original 
validity  of  the  notes. 

The  first  request  for  instructions  was  properly  refused.  It 
seems  to  refer  to  a  supposed  theory  of  the  plaintiff  that  the 
notes  might  be  ratified  by  the  directors,  whereas  the  sole 
question  submitted  to  the  jury  was  whether  the}-  had  been 
ratified  bj*  the  stockholders,  that  is,  by  the  corporation  itself. 

The  third  request  is  open  to  the  same  objection. 

The  second  request  sought  to  incorporate  into  the  doctrine 
of  ratification  a  new  element,  namely,  that,  in  order  to  make 
a  valid  ratification,  the  principal  must  have  known,  not  only 
all  the  facts,  but  also  the  legal  effect  of  the  facts,  and  then, 
with  a  knowledge  both  of  the  law  and  facts,  have  ratified  the 
contracts  by  some  independent  and  substantive  act.  This 
request  also  was  properly  refused.  It  is  sufficient  if  a  ratifica- 
tion is  made  with  a  full  knowledge  of  all  the  material  facts. 
Indeed,  a  rule  somewhat  less  stringent  than  this  may  properly 
be  laid  down,  when  one  purposely  shuts  his  e}'es  to  means  of 
information  within  his  own  possession  and  control,  and  rati- 
fies an  act  deliberately,  having  all  the  knowledge  in  respect  to 
it  which  he  cares  to  have.  Combs  v.  Scott,  12  Allen,  493, 
497  ;  Phosphate  of  Lime  Co.  v.  Green,  L.  R.  7  C.  P.  43,  57. 

The  fourth  and  fifth  requests  were  both  to  the  effect  that, 
on  all  the  evidence,  the  jury  would  not  be  warranted  in  find- 
ing a  ratification.  The  circumstances  of  the  case  were  such 
as  to  render  the  inference  of  ratification  natural  and  eas}', 
especially  in  view  of  the  lapse  of  time  since  the  notes  were 
given.  There  was  uncontradicted  evidence  tending  to  show 
that  the  directors  made  a  contract  with  one  Gowan  for  build- 
ing the  road  for  a  certain  price  in  money  and  stock,  and  that 


72  AGENCY  BY  RATIFICATION.  [CH.  HI. 

he  gave  to  the  compan}'  a  bond,  with  Kelley  and  Binne}-  as 
sureties,  for  the  faithful  performance  of  his  contract.  Gowan 
failing  to  perform  his  contract,  the  board  of  directors  called 
on  the  sureties,  who  themselves  were  directors,  to  perform  it, 
with  notice  that  they  would  be  held  liable  to  the  company  for 
all  damages  that  might  accrue  to  the  company  by  their  default. 
Thereupon  the  sureties  proceeded  to  finish  the  road,  according 
to  the  contract,  in  which  originally  they  had  no  interest.  The 
price  was  fair  and  reasonable  ;  the  road  as  completed  by  them 
was  a  well-built  road  ;  the  advancements  made  by  them  were 
in  consequence  of  the  notice  given  to  them  b}"  the  directors, 
and  not  with  anj'  fraudulent  design  to  obtain  an}"  pecuniary 
benefit  for  themselves  from  said  contract.  The  settlement 
was  made  with  them  by  the  directors,  under  authority  of  a 
general  vote  of  the  stockholders  authorizing  them  to  make  any 
settlement,  and  the  notes  in  suit  were  given. 

As  a  general  rule,  a  contract  between  a  corporation  and  its 
directors  is  not  absolutely  void,  but  voidable  at  the  election 
of  the  corporation.  Such  a  contract  does  not  necessarily 
require  any  independent  and  substantive  act  of  ratification, 
but  it  may  become  finally  established  as  a  valid  contract  by 
acquiescence.  The  right  to  avoid  it  may  be  waived.  Union 
Pacific  Railroad  v.  Credit  Mobilier,  135  Mass.  367,  376 ; 
Twin-Lick  Oil  Co.  v.  Marbury,  91  U.  S.  587  ;  Hotel  Co  v. 
Wade,  97  U.  S.  13  ;  Ashhurst's  Appeal,  60  Penn.  St.  290. 
In  the  present  case,  such  ratification  or  waiver  might  well  be 
inferred,  and  indeed  we  do  not  see  how  any  other  inference 
could  fairly  be  drawn,  from  the  act  of  the  company  in  holding 
and  operating  the  road  for  so  many  years  without  taking  any 
steps  to  repudiate  the  notes,  from  the  payment  of  interest, 
from  the  acceptance  of  the  report  of  the  treasurer  on  October 
6,  1875,  and  October  2,  1878,  in  which  these  notes  were  re- 
ferred to  as  outstanding  obligations,  and  from  the  acceptance 
of  the  Statute  of  1884,  c.  159,  authorizing  the  company  to  issue 
bonds  to  an  amount  not  exceeding  $30,000,  for  the  purpose 
of  extinguishing  its  floating  debt. 

Exceptions  overruled. 


§  38.]  WALTER  V.   JAMES.  73 

6.   Right  of  other  party  to  recede  before  ratification. 

§  3a]  WALTER  v.   JAMES. 

L.  R.  6  Exchequer,  124.  — 1871. 

Action  on  an  attorney's  bill  to  recover  £63  17s.  3d. 
Defendant  paid  into  court  £3  17s.  3c?.,  and  to  the  residue 
pleaded  payment.  Verdict  for  defendant,  with  leave  to 
plaintiff  to  move  to  enter  the  verdict  for  him,  the  court  to 
have  power  to  draw  inferences  of  fact.  Rule  obtained 
accordingly. 

Plaintiff  had  a  claim  against  defendant.  One  Southall, 
after  his  authority  had  been  revoked,  paid  plaintiff  £60  in 
satisfaction  of  the  claim.  Subsequently,  by  agreement  be- 
tween Southall  and  plaintiff,  the  money  was  returned  to 
Southall.  No  evidence  of  defendant's  ratification  before  plea 
in  this  action  was  given.  The  trial  court  ruled  that  defendant 
could  take  advantage  of  Southall's  paj-ment. 

Kellet,  C.  B.  Southall,  in  paying  the  debt,  appeared  to 
act  as  the  defendant's  agent ;  but  it  turned  out  afterwards 
that,  although  he  had  originally  been  authorized  by  the 
defendant  to  come  to  an  arrangement  with  the  plaintiff,  and 
to  make  this  pajment,  that  authoritj'  had  been  revoked 
before  the  payment  was  made.  He  did  not,  however, 
communicate  to  the  plaintiff  that  he  had  no  authority ;  on 
the  contrary,  he  professed  to  act  for  the  defendant,  and  the 
plaintiff  believed  him  to  be  so  acting,  and  received  the  sum 
paid  in  full  satisfaction  of  his  debt.  But  when  the  plaintiff 
found  that  the  money  had  been  paid  without  the  defendant's 
authority,  he  returned  the  money  to  Southall.  And  now 
the  question  is,  whether  the  defendant  can  by  his  plea  of 
payment  adopt  and  ratify  the  act  of  Southall,  although  before 
action  that  act  had,  bj-  arrangement  between  the  plaintiff  and 
Southall,  been  undone. 

Now,  the  law  is  clear,  that  where  one  makes  a  payment  in 
the  name  and  on  behalf  of  another  without  authoritj*,  it  is 
competent  for  the  debtor  to  ratify  the  payment ;  and  there 


74  AGENCY  BY  RATIFICATION.  [CH.  m. 

seems  to  be  no  doubt  on  the  authorities  that  he  can  ratify 
after  action  by  placing  the  plea  of  payment  on  the  record. 
Prima  facie,  therefore,  we  have  here  a  ratification  of  the 
payment  by  the  defendant's  plea ;  but  whether  the  payment 
was  then  capable  of  ratification  depends  on  whether  previ- 
ously it  was  competent  to  the  plaintiff  and  Southall,  apart 
from  the  defendant,  to  cancel  what  had  taken  place  between 
them.  I  am  of  opinion  that  it  was  competent  to  them  to 
undo  what  they  had  done.  The  evidence  shows  that  the 
plaintiff  received  the  money  in  satisfaction  under  the  mistaken 
idea  that  Southall  had  authority  from  the  defendant  to  pay 
him.  This  was  a  mistake  in  fact,  on  discovering  which  he 
was,  I  think,  entitled  to  return  the  money,  and  apply  to  his 
debtor  for  payment.  If  he  had  insisted  on  keeping  it,  the 
defendant  might  at  any  moment  have  repudiated  the  act  of 
Southall,  and  Southall  would  then  have  been  able  to  recover 
it  from  the  plaintiff  as  money'  received  for  Southall's  use.  I 
am,  therefore,  of  opinion  that  the  plaintiff,  who  originally 
accepted  this  money  under  an  entire  misapprehension,  was 
justified  in  returning  it,  the  position  of  the  parties  not  having 
been  in  the  meantime  in  any  way  altered,  and  that  the  defend- 
ant's plea  of  payment  fails.  The  rule  must  accordingly  be 
made  absolute. 

Martin,  B.  I  am  of  the  same  opinion.  The  rule  which  I 
conceive  to  be  the  correct  one  may  be  stated  as  follows : 
When  a  payment  is  not  made  by  way  of  gift  for  the  benefit 
of  the  debtor,  but  by  an  agent  who  intended  that  he  should 
be  reimbursed  by  the  debtor,  but  who  had  not  the  debtor's 
authority  to  pay,  it  is  competent  for  the  creditor  and  the 
person  paying  to  rescind  the  transaction  at  any  time  before 
the  debtor  has  affirmed  the  payment,  and  repay  the  money, 
and  thereupon  the  payment  is  at  an  end,  and  the  debtor 
again  responsible.  This  being,  in  my  judgment,  the  true 
rule,  the  plaintiff  in  this  case  was  entitled  to  recover. 

Kellet,  C.  B.  My  Brother  Cleasby  concurs  in  the  judgment 
of  the  court.  Rule  absolute. 


§  38.]      BOLTON  PARTNERS  V.   LAMBERT.         75 


§38.]         BOLTON  PARTNERS  v.   LAMBERT. 
L.  R.  41  Chancery  Division  (C.  A.),  295.  —  1889. 

Action  for  specific  performance  of  an  agreement  to  take  a 
lease.     Decree  for  plaintiff.     Defendant  appeals. 

Defendant  made  to  an  agent  of  plaintiff  an  offer  to  take  a 
lease  of  plaintiffs  premises.  The  agent,  without  authority, 
accepted  the  offer  in  behalf  of  the  company.  Later,  defendant 
withdrew  his  offer,  and,  later  still,  the  board  of  directors  of 
the  plaintiff  company  ratified  the  agent's  agreement. 

Lindlet,  L.  J.  ...  The  question  is,  what  is  the  conse- 
quence of  the  withdrawal  of  the  offer  after  acceptance  by  the 
assumed  agent,  but  before  the  authorit}'  of  the  agent  has  been 
ratified?  Is  the  withdrawal  in  time?  It  is  said  on  the  one 
hand  that  the  ordinary  principle  of  law  applies,  viz.,  that  an 
offer  may  be  withdrawn  before  acceptance.  That  proposi- 
tion is  of  course  true.  But  the  question  is,  acceptance  by 
whom?  It  is  not  a  question  whether  a  mere  offer  can  be 
withdrawn,  but  the  question  is  whether,  when  there  has  been 
in  fact  an  acceptance  which  is  in  form  an  acceptance  by  a 
principal  through  his  agent,  though  the  person  assuming  to 
act  as  agent  has  not  then  been  so  authorized,  there  can  or 
cannot  be  a  withdrawal  of  the  offer  before  the  ratification  of 
the  acceptance  ?  I  can  find  no  authority  in  the  books  to  war- 
rant the  contention  that  an  offer  made,  and  in  fact  accepted 
by  a  principal  through  an  agent  or  otherwise,  can  be  with- 
drawn. The  true  view,  on  the  contrary,  appears  to  be  that 
the  doctrine  as  to  the  retrospective  action  of  ratification  is 
applicable. 

If  we  look  at  Mr.  Brice's  argument  closely,  it  will  be  found 
to  turn  on  this,  —  that  the  acceptance  was  a  nullit}',  and  un- 
less we  are  prepared  to  say  that  the  acceptance  of  the  agent 
was  absolutely  a  nullity,  Mr.  Brice's  contention  cannot  be 
accepted.  That  the  acceptance  by  the  assumed  agent  can- 
not be  treated  as  going  for  nothing  is  apparent  from  the  case 
of  Walter  v.  James,  Law  Rep.  6  Ex.  124.     I  see  no  reason 


76  AGENCY  BY  RATIFICATION.  [CH.  m. 

to  take  this  case  out  of  the  application  of  the  general  principle 
as  to  ratification.     The  appeal  therefore  fails  on  all  points. 

Cotton,  L.  J.  ...  But  then  it  is  said  that  on  the  13th  of 
Januar}',  1887,  the  defendant  entirely  withdrew  the  offer  he 
had  made.  Of  course  the  withdrawal  could  not  be  effective, 
if  it  were  made  after  the  contract  had  become  complete.  As 
soon  as  the  offer  has  been  accepted  the  contract  is  complete. 
But  it  is  said  that  there  could  be  a  withdrawal  by  the  de- 
fendant on  the  13th  of  Januar}'  on  this  ground,  that  the  offer 
of  the  defendant  had  been  accepted  by  Scratchle\\  a  director 
of  the  plaintiff  company,  who  was  not  authorized  to  bind  the 
compan}-  bj1  acceptance  of  the  offer,  and  therefore  that  until 
the  company  ratified  Scratchley's  act  there  was  no  acceptance 
on  behalf  of  the  company  binding  on  the  compan}',  and  there- 
fore the  defendant  could  withdraw  his  offer.  Is  that  so? 
The  rule  as  to  ratification  by  a  principal  of  acts  done  b}T  an 
assumed  agent  is  that  the  ratification  is  thrown  back  to  the 
date  of  the  act  done,  and  that  the  agent  is  put  in  the  same 
position  as  if  he  had  had  authority  to  do  the  act  at  the  time 
the  act  was  done  by  him.  Various  cases  have  been  referred 
to  as  laying  down  this  principle,  but  there  is  no  case  exactly 
like  the  present  one.  The  case  of  Hagedorn  v.  Oliverson,  2 
M.  &  S.  485,  is  a  strong  case  of  the  application  of  the  prin- 
ciple. It  was  there  pointed  out  how  favorable  the  rule  was 
to  the  principal,  because  till  ratification  he  was  not  bound, 
and  he  had  an  option  to  adopt  or  not  to  adopt  what  had  been 
done.  In  that  case  the  plaintiff  had  effected  an  insurance  on 
a  ship  in  which  another  person  was  interested,  and  it  was 
held  that  long  after  the  ship  had  been  lost  the  other  person 
might  adopt  the  act  of  the  plaintiff,  though  done  without  au- 
thority, so  as  to  enable  the  plaintiff  to  sue  upon  the  policy. 
Again,  in  Ancona  v.  Marks,  7  H.  &  N.  686,  where  a  bill 
was  indorsed  to  and  sued  on  in  the  name  of  Ancona,  who 
had  given  no  authority  for  that  purpose,  yet  it  was  held  that 
Ancona  could,  after  the  action  had  been  brought,  ratify  what 
had  been  done,  and  that  the  subsequent  ratification  was  equiv- 
alent to  a  prior  authority  so  as  to  entitle  Ancona  to  sue 


§  38.]     BOLTON  PARTNERS  V.   LAMBERT.         77 

upon  the  bill.  It  was  said  by  Mr.  Brice  that  in  that  case 
there  was  a  previously  existing  liability  of  the  defendant 
toward  some  person  ;  but  the  liability  of  the  defendant  to 
Ancona  was  established  b}*  Ancona's  authorizing  and  ratify- 
ing the  act  of  the  agent,  and  a  previously  existing  liability  to 
others  did  not  affect  the  principle  laid  down. 

The  rule  as  to  ratification  is  of  course  subject  to  some  ex- 
ceptions. An  estate  once  vested  cannot  be  divested,  nor  can 
an  act  lawful  at  the  time  of  its  performance  be  rendered  un- 
lawful by  the  application  of  the  doctrine  of  ratification.  The 
case  of  Walter  v.  James,  Law  Rep.  6  Ex.  124,  was  relied  on 
by  the  appellant,  but  in  that  case  there  was  an  agreement 
between  the  assumed  agent  of  the  defendant  and  the  plaintiff 
to  cancel  what  had  been  done  before  any  ratification  by  the 
defendant ;  in  the  present  case  there  was  no  agreement  made 
between  Scratchley  and  the  defendant  that  what  had  been 
done  by  Scratchley  should  be  considered  as  null  and  void. 

The  case  of  Bird  v.  Brown,  4  Ex.  786,  which  was  also  relied 
on  by  the  appellant,  is  distinguishable  from  this  case.  There 
it  was  held  that  the  ratification  could  not  operate  to  divest 
the  ownership  which  had  previously  vested  in  the  purchaser  by 
the  delivery  of  the  goods  before  the  ratification  of  the  alleged 
stoppage  in  tra?isitu.  So  also  in  Lyell  v.  Kennedy,  18  Q.  B. 
D.  796,  the  plaintiff,  who  represented  the  lawful  heir,  desired, 
after  the  defendant  Kennedy  had  acquired  a  title  to  the  estate 
b}r  means  of  the  Statute  of  Limitations,  and  after  the  title  of 
the  heir  was  gone,  to  ratify  the  act  of  Kenned}1  as  to  the  re- 
ceipt of  rents,  so  as  to  make  the  estate  vest  in  the  heir.  In 
m}7  opinion,  none  of  these  cases  support  the  appellant's 
contention. 

I  think  the  proper  view  is  that  the  acceptance  by  Scratchley 
did  constitute  a  contract,  subject  to  its  being  shown  that 
Scratchlej-  had  authority  to  bind  the  company.  If  that  were 
not  shown,  there  would  be  no  contract  on  the  part  of  the 
company,  but  when  and  as  soon  as  authorit\-  was  given  to 
Scratchley  to  bind  the  companj',  the  authority  was  thrown 
back  to  the  time  when  the  act  was  done  by  Scratchley,  and 


78  AGENCY  BY  RATIFICATION.  [CH.  m. 

prevented  the  defendant  withdrawing  his  offer,  because  it  was 
then  no  longer  an  offer,  but  a  binding  contract. 

This  point  therefore  must  also  be  decided  against  the  appel- 
lant Another  point  was  raised  as  to  misrepresentation,  but, 
having  regard  to  the  evidence,  in  my  opinion  that  has  not  been 
made  out.    The  appeal  therefore  fails. 

Lopes,  L.  J.,  also  delivered  a  concurring  opinion. 

Appeal  dismissed. 


§  38.]     McCLLNTOCK  v.   SOUTH  PENN  OIL  CO. 
146  Pennsylvania  State,  144.  —  1892. 

Assumpsit  for  breach  of  contract  to  purchase  by  assign- 
ment a  land  contract  existing  between  plaintiff  and  one 
Donaldson.     Judgment  for  plaintiff.     Defendant  appeals. 

Plaintiff's  agent  made  the  sale  without  having  written 
authority,  and  indorsed  a  memorandum  of  it  upon  the 
Donaldson  contract.  Subsequently  plaintiff  ratified  the  act 
in  writing  bj-  making,  signing,  and  acknowledging  upon  the 
Donaldson  contract  a  written  transfer  of  her  interest  in  it. 
Defendant  refused  to  accept  this  transfer  or  to  pay  the  pur- 
chase price.  Plaintiff,  relying  on  the  assignment,  did  not 
perform  the  conditions  of  the  Donaldson  contract,  nor  did 
defendant,  and  it  was  forfeited. 

Mr.  Justice  Mitchell.  The  receipt  by  plaintiff's  husband 
expressed  the  fact  of  a  sale,  by  the  acknowledgment  of  re- 
ceipt of  part  of  the  purchase  monej*,  and  fixed  the  time  and 
amount  of  the  remaining  payment.  All  the  other  terms  of  the 
contract,  including  the  identification  of  the  subject-matter, 
were  shown  b}'  the  original  agreement  of  Donaldson,  on 
which  the  receipt  was  indorsed.  The  two  papers  thus  consti- 
tuted one  instrument,  which,  so  far  as  appears  on  its  face, 
was  a  sufficient  memorandum  in  writing  to  satisfy  the  Statute 
of  Frauds.  Its  defect  in  that  regard  was  dehors  the  instrument 
itself,  and  lay  in  the  want  of  written  authority  in  the  hus- 


§  38.]  MCCLINTOCK  V.   OIL  CO.  79 

band  to  act  as  agent  for  his  wife.  Had  his  authority  been  in 
writing  at  that  time,  even  though  on  a  separate  paper,  no 
question  of  the  validity  and  binding  force  of  the  contract 
could  have  arisen.  His  action  as  agent  was,  however,  for- 
mally ratified  and  adopted  by  the  wife,  in  writing,  before  any 
rescission  or  change  of  position  in  any  way  by  the  defendant. 

The  exact  question  before  us,  therefore,  is  whether  such 
ratification  by  the  wife,  of  its  own  force,  perfected  and 
validated  the  agent's  original  contract,  or  whether  it  still 
required  acceptance  by  the  grantee. 

No  case  precisely  in  point  has  been  found,  and  we  are  left 
to  determine  the  question  on  general  principles.  It  is  con- 
ceded that  a  deed  tendered  bj'  the  vendor,  but  refused  by  the 
vendee,  will  not  validate  a  parol  contract,  and  it  is  argued 
that  the  present  case  stands  upon  the  same  footing.  But  I 
apprehend  that  the  rule  in  question  results  from  the  common- 
law  requirement  that  every  writing  must  be  accepted  before 
it  becomes  a  contract.  It  is  sometimes  said,  however,  that 
the  reason  a  deed  tendered  is  ineffectual  under  the  statute,  is 
that  until  such  tender  the  vendor  was  not  bound  ;  the  vendee 
could  not  have  held  him,  and,  there  being  therefore  a  want 
of  mutualit}T  in  the  agreement,  equity  will  not  specialty  en- 
force it.  Whether  the  equitable  doctrine  of  mutuality  has 
any  proper  place  in  cases  arising  under  the  Statute  of  Frauds, 
is  a  vexed  question  on  which  our  decisions  are  not  in  har- 
mony, and  are  badly  in  need  of  review  and  authoritative 
settlement.  See  Tripp  v.  Bishop,  56  Pa.  424 ;  Meason  v. 
Kaine,  63  Pa.  335  ;  Sands  v.  Arthur,  84  Pa.  479,  and  the 
comment  upon  them  by  Judge  Reed  in  his  treatise  on  the 
Statute  of  Frauds,  §  367.  But  whatever  the  foundation  of 
the  rule,  it  is  doubtful  if  the  case  of  ratification  of  an  agent's 
act  comes  fairly  within  it.  If  the  agent  had  been  properly 
authorized,  the  contract  would  have  bound  both  parties  in 
the  first  instance ;  and  the  settled  rule  is  that  ratification  is 
equivalent  in  every  way  to  plenary  prior  authority.  The  ob- 
jection of  want  of  mutuality  is  not  good  in  many  cases  of 
dealing  with  an  agent,  for  if  he  exceeds  his  authority,  actual 


SO  AGENCY  BY  BATIFICATION.  [CH.  m. 

and  apparent,  his  principal  will  not  be  bound,  jet  may  ratify, 
and  then  the  other  party  will  be  bound  from  the  inception  of 
the  agreement.  The  aggregatio  mentium  of  the  parties  need 
not  commence  simultaneously.  It  must  co-exist ;  but  there 
must  be  a  period  when  the  question  of  contract  or  no  con- 
tract rests  on  the  will  of  one  part}7  to  accept  or  reject  a 
proposition  made,  and  this  interval  may  be  long  or  short. 
The  offer,  of  course,  may  be  revoked  or  withdrawn  at  any 
time  prior  to  acceptance,  but  after  acceptance  it  is  too 
late.  The  contract  is  complete.  If,  in  the  present  case,  the 
defendants  had  written  a  letter  to  plaintiff,  stating  that 
they  had  made  the  agreement  with  her  husband  as  agent, 
but  that,  his  authority  not  being  in  writing,  they  requested 
her  to  send  them  a  written  ratification,  and  thereupon  she 
had  written  and  mailed  an  acceptance  and  ratification  of 
her  agent's  act,  there  could  be  no  question  of  the  contract. 
Hamilton  v.  Insurance  Co.,  5  Pa.  339,  and  cases  cited  in 
3  Am.  &  Eng.  Encjx.  of  Law,  856,  tit.  Contract;  and  13 
Am.  &  Eng.  Encyc  of  Law,  233,  tit.  Mail.  And,  in  effect, 
that  is  just  what  the  defendant  did  here.  It  made  the  origi- 
nal agreement  with  the  husband,  evidenced  by  his  indorse- 
ment on  the  Donaldson  contract,  which  was  delivered  into 
its  possession.  On  the  day  that  payment  was  called  for  by 
the  indorsed  agreement,  the  defendant  further  indorsed  on 
the  contract  an  assignment  by  husband  and  wife,  which 
would  be  a  written  ratification  of  the  most  formal  kind,  of 
the  husband's  previous  act,  and,,  as  the  jurjT  have  found,  de- 
livered it  to  the  husband  unconditionally,  for  execution  and 
acknowledgment.  The  defendant's  consent  to  the  contract 
sued  upon  was  thus  manifested ;  and  upon  acceptance  by 
plaintiff,  the  contract  became  binding  as  a  common -law  con- 
tract of  both  parties,  and  upon  her  signature  it  became  a 
contract  in  writing  within  all  the  requirements  of  the  statute. 
The  objects  of  the  act,  certaint}'  of  subject-matter,  precision 
of  terms,  reliability  of  evidence,  and  clearness  of  intent  of 
the  landowner  are  all  secured,  and  we  see  no  particular  in 
which  either  the  letter  or  the  policy  of  the  statute  has  been 
violated. 


§  38.]  DODGE  V.   HOPKINS.  81 

The  cases  cited  by  appellee,  though  not  decisions  on  the 
precise  point,  tend  to  sustain  the  conclusion  here  reached. 
Maclean  v.  Dunn,  4  Bing.  722,  was  under  the  English  stat- 
ute, which  requires  only  that  the  agent  should  be  "  lawfully 
authorized ; "  but  the  opinion  of  Lord  Chief  Justice  Best 
illustrates  the  effectiveness  of  ratification  as  equivalent  to 
antecedent  authority.  In  our  own  case  of  McDowell  v. 
Simpso7i,  3  W.  129,  the  opinion  of  Kennedy,  J.,  is  clearly 
expressed  that  a  lease  by  an  agent  in  excess  of  any  au- 
thority, either  parol  or  written,  may  be  ratified,  but  the 
ratification,  to  create  a  valid  term  for  seven  years,  must  be  in 
writing.  So  far  as  the  case  goes,  it  is  directly  in  line  with 
our  present  conclusion,  and  it  has  never  been  questioned, 
but,  on  the  contrarj',  is  cited  with  approval  in  Dumn  v.  Moth- 
ermel,  112  Pa.  272. 

This  disposes  of  the  main  question  in  the  case,  and  with  it 
the  exceptions  relating  to  the  measure  of  damages  fall.  The 
plaintiff  recovered  only  the  contract  price  to  which  she  was 
entitled.  .  .  ,  Judgment  affirmed. 


§38.]  DODGE  v.  HOPKINS. 

14  Wisconsin,  630. —  1861. 

Action  to  recover  instalments  alleged  to  be  due  upon  a 
land  contract.  Verdict  and  judgment  for  plaintiff.  Defendant 
appeals. 

Plaintiff's  agent  sold  the  lands  without  authority.  The 
question  arises  as  to  the  effect  of  plaintiff's  ratification. 

Dixon,  C.  J.  (after  deciding  that  the  agent's  acts  were 
unauthorized).  We  are  next  to  ascertain  the  effect  of  this 
want  of  authority  upon  the  rights  of  the  defendant  It  is  very^ 
clear,  in  the  present  condition  of  the  case,  that  the  plaintiff 
was  not  bound  bj*  the  contract,  and  that  he  was  at  libert}'  to 
repudiate  it  at  any  time  before  it  had  actualty  received  his 
sanction.    Was  the  defendant  bound?    And  if  he  was  not, 

6 


82  AGENCY  BY  RATIFICATION.  [CH.  HI. 

could  the  plaintiff,  by  his  sole  act  of  ratification,  make  the 
contract  obligator}'  upon  him?  We  answer  both  these  ques- 
tions in  the  negative.  The  covenants  were  mutual,  —  those  of 
the  defendant  for  the  payment  of  the  money  being  in  con- 
sideration of  that  of  the  plaintiff  for  the  conveyance  of  the 
lands.  The  intention  of  the  parties  was  that  they  should  be 
mutually  bound, — that  each  should  execute  the  instrument 
so  that  the  other  could  set  it  up  as  a  binding  contract  agaiust 
him,  at  law  as  well  as  in  equity,  from  the  moment  of  its 
execution. 

In  such  cases  it  is  well  settled,  both  on  principle  and 
authority,  that  if  either  party  neglects  or  refuses  to  biud  him- 
self, the  instrument  is  void  for  want  of  mutuality,  and  the 
party  who  is  not  bound  cannot  avail  himself  of  it  as  obligatory 
upon  the  other.  Townsend  v.  Corning,  23  Wend.  (N.  Y.) 
435;  and  Tow?isetid  v.  Hubbard,  4  Hill  (N.  Y.),  351,  and 
cases  there  cited.  The  same  authorities  also  show  that  where 
the  instrument  is  thus  void  in  its  inception,  no  subsequent 
act  of  the  part}'  who  has  neglected  to  execute  it,  can  render  it 
obligator}'  upon  the  party  who  did  execute,  without  his 
assent.  The  opinion  of  Judge  Bronson  in  the  first-named  case 
is  a  conclusive  answer  to  all  arguments  to  be  drawn  from  the 
subsequent  ratification  of  the  party  who  was  not  originally 
bound.  In  that  case,  as  in  this,  the  vendors  had  failed  to 
bind  themselves  by  the  agreement.  He  says  :  "  It  would  be 
most  extraordinary  if  the  vendors  could  wait  and  speculate 
upon  the  market,  and  then  abandon  or  set  up  the  contract  as 
their  own  interests  might  dictate.  But  without  any  reference 
to  prices,  and  whether  the  delay  was  long  or  short,  if  this  was 
not  the  deed  of  the  vendee  at  the  time  it  was  signed  by  him- 
self and  Baldwin  (the  agent),  it  is  impossible  that  the  vendors, 
by  any  subsequent  act  of  their  own  without  his  assent,  could 
make  it  his  deed.  There  is,  I  think,  no  principle  in  the  law 
which  will  sanction  such  a  doctrine."  The  only  point  in 
which  the  facts  in  that  case  differ  materially  from  those  here 
presented,  is  that  no  part  of  the  purchase  money  was  advanced 
to  the  agent.     But  that  circumstance  cannot  vary  the  appliea- 


§  38.]  DODGE  V.  HOPKINS.  83 

tion  of  the  principle.  The  pajment  of  the  money  to  the 
agent  did  not  affect  the  validity  of  the  contract,  or  make  it 
binding  upon  the  plaintiff.  He  was  at  liberty  to  reject  the 
money,  and  his  acceptance  of  it  was  an  act  of  ratification 
with  which  the  defendant  was  in  no  way  connected,  and 
which,  although  it  might  bind  him,  imposed  no  obligation 
upon  the  defendant  until  he  actually  assented  to  it.  It 
required  the  assent  of  both  parties  to  give  the  contract  any 
validity  or  force. 

I  am  well  aware  that  there  are  dicta  and  observations  to  be 
found  in  the  books,  which,  if  taken  literally,  would  overthrow 
the  doctrine  of  the  cases  to  which  I  have  referred.  It  is  said 
in  Lawrence  v.  Taylor,  5  Hill  (N.  Y.),  107,  that  "  such 
adoptive  authority  relates  back  to  the  time  of  the  transaction, 
and  is  deemed  in  law  the  same  to  all  purposes  as  if  it  had 
been  given  before."  And  in  Newton  v.  JBronson,  3  Kern. 
(N. Y.)  587  (67  Am.  Dec.  87),  the  court  say:  "  That  a  sub- 
sequent ratification  is  equally  effectual  as  an  original  authority, 
is  well  settled."  Such  expressions  are,  no  doubt,  of  frequent 
occurrence ;  and  although  they  displaj'  too  much  carelessness 
in  the  use  of  language,  yet,  if  they  are  understood  as  appli- 
cable only  to  the  cases  in  which  they  occur,  they  may  be  con- 
sidered as  a  correct  statement  of  the  law.  The  inaccuracy 
consists  in  not  properly  distinguishing  between  those  cases 
where  the  subsequent  act  of  ratification  is  put  forth  as  the 
foundation  of  a  right  in  favor  of  the  party  who  has  ratified, 
and  those  where  it  is  made  the  basis  of  a  demand  against 
him.  There  is  a  broad  and  manifest  difference  between  a 
case  in  which  a  party  seeks  to  avail  himself,  by  subsequent 
assent,  of  the  unauthorized  act  of  his  own  agent,  in  order  to 
enforce  a  claim  against  a  third  person,  and  the  case  of  a  party 
acquiring  an  inchoate  right  against  a  principal  by  an  unautho- 
rized act  of  his  agent,  to  which  validity  is  afterwards  given 
by  the  assent  or  recognition  of  the  principal.  Paley  on 
Agenc}',  192,  note.  The  principal  in  such  a  case  may,  by 
his  subsequent  assent,  bind  himself;  but,  if  the  contract  be 
executory,  he  cannot  bind  the  other  party.    The  latter  may, 


84  AGENCY  BY  KATIFICATION.  [CH.  in. 

if  he  choose,  avail  himself  of  such  assent  against  the  princi- 
pal, which,  if  he  does,  the  contract,  by  virtue  of  such  mutual 
ratification,  becomes  mutually  obligatory.  There  are  many 
cases  where  the  acts  of  parties,  though  unavailable  for  their 
own  benefit,  may  be  used  against  them.  It  is  upon  this 
obvious  distinction,  I  apprehend,  that  the  decisions  which  I 
have  cited  are  to  be  sustained.  Lawrence  \.  Taylor  and 
Newton  v.  Bronson  were  both  actions  in  which  the  adverse 
party  claimed  rights  through  the  agency  of  individuals  whose 
acts  had  been  subsequently  ratified.  And  the  authorities 
cited  in  support  of  the  proposition  laid  down  in  the  last  case 
{Weed  v.  Carpenter,  4  Wend.  219 ;  Episcopal  Society  v. 
Episcopal  Church,  1  Pick.  372  ;  Corning  v.  Southland,  3  Hill, 
552  ;  Moss  v.  Mossie  Lead  Mining  Co.,  5  Id.  137 ;  Clark  v. 
Van  Reimsdyk,  9  Cranch,  153  ;  Willinks  v.  Hollingsworth, 
6  Wheat.  241),  will,  when  examined,  be  found  to  have  been 
cases  where  the  subsequent  assent  was  employed  against 
the  persons  who  had  given  it,  and  taken  the  benefit  of  the 
contract. 

(The  court  then  considers  the  effect  of  the  unauthorized 
contract  under  the  Statute  of  Frauds.) 

No  original  authority  to  the  agent  making  the  contract 
having  been  shown,  and  no  evidence  offered  on  the  trial  of 
such  ratification  as  bound  the  defendant,  it  follows  that  the 
judgment  must  be  reversed,  and  a  new  trial  awarded. 

Ordered  accordingly.1 


7.   Competency  of  principal. 

§15.]  PHILPOT  v.  BINGHAM. 

55  Alabama,  435.  — 1876. 
[Reported  herein  at  p.  18.] 

1  The  doctrine  of  this  case  is  approved  and  applied  in  Atlee  v.  Bartholo- 
mew, 69  Wis.  43  (1887). 


§  40.]  HEATH  V.   NUTTER.  85 

8.  Form  of  ratification. 

§40.]  HEATH  v.   NUTTER  et  al. 

50  Maine,  378.  — 1862. 

Writ  of  entry.  Defendants  claim  under  a  deed  from 
one  Bobbins,  by  bis  attorney  Rich,  and,  in  case  the  power  of 
attorney  to  Rich  should  be  insufficient,  offered  to  show  a 
ratification  of  the  conveyance  by  Robbins,  by  receiving  the 
consideration  and  by  oral  statements.  This  testimony  was 
excluded,  and  the  power  held  insufficient.  Plaintiff  claims 
under  a  quit-claim  deed  from  Robbins. 

Appleton,  C.  J.  The  power  of  attorney  to  Rich  did  not 
empower  him  to  convey  the  demanded  premises  to  the 
inhabitants  of  Tremont.  The  authority  "  to  grant  any  and 
all  discharges  by  deed  or  otherwise,  both  personal  and  real," 
as  fully  as  the  principal  might  do,  cannot  be  fairly  construed 
as  enabling  the  agent  to  convey  by  bill  of  sale,  or  by  deed  of 
warrant}',  all  the  personal  and  real  estate  of  his  principal. 
Nor  can  the  authorit}-  to  convej-  by  deed  be  found  elsewhere. 

Whenever  any  act  of  agency  is  required  to  be  done  in  the 
name  of  the  principal  under  seal,  the  authority  to  do  the  act 
must  be  conferred  by  an  instrument  under  seal.  A  power  to 
convey^  lands  must  possess  the  same  requisites,  and  observe 
the  same  solemnities  as  are  necessary  in  a  deed  directly  con- 
veying the  land.  Gage  v.  Gage,  30  N.  H.  420 ;  Story  on 
Agency,  §§  49,  50 ;  Montgomery  v.  Dorion,  6  N.  H.  250. 
So  the  ratification  of  an  unauthorized  conveyance  by  deed 
must  be  by  an  instrument  under  seal.  Story  on  Agency, 
§  252.  A  parol  ratification  is  not  sufficient.  Stetson  v. 
Patten,  2  Greenl.  359;  Paine  v.  Tucker,  21  Me.  138; 
Hanford  v.  McRair,  9  Wend.  54  ;  Despatch  Line  Co.  v. 
Bellamy  Manuf.  Co.,  12  N.  H.  205. 

The  plaintiff  received  his  conve}Tance  with  a  full  knowledge 
of  the  equitable  rights  of  the  tenants.  The  remedial  processes 
of  a  court  of  equity  may  perhaps  afford  protection  to  the 
defendants.    At  common  law  their  defence  fails. 

Defendants  defaulted. 


86  AGENCY   BY  RATIFICATION.  [CH.  HL 

§40.]  McINTYRE  v.  PARK. 

11  Gray  (Mass.),  102.  — 1858. 

Contract,  for  the  non-performance  of  an  indenture  where- 
by defendants  agreed  to  purchase  a  parcel  of  land  of  plaintiff. 
Verdict  for  plaiutiff.     Defendant  alleges  exceptions. 

The  contract  was  signed  by  a  co-purchaser  in  Park's  name 
without  Park's  authority.  The  judge  ruled  that  evidence 
was  competent  to  show  Park's  adoption  or  ratification  of 
this  unauthorized  execution  of  the  instrument. 

Metcalf,  J.  We  express  no  opinion  on  the  question 
whether  the  sum  of  five  hundred  dollars,  mentioned  in  the 
agreement  upon  which  this  action  is  brought,  is  a  penalty 
or  liquidated  damages.  That  point  was  ruled  in  the  defend- 
ant's favor,  and  the  plaintiff  has  not  excepted  to  the 
ruling. 

The  evidence  of  the  defendant's  ratification  or  adoption  of 
the  agreement  executed  in  his  name  was  rightly  admitted ; 
and  he,  by  such  ratification  or  adoption,  became  answerable 
for  a  breach  of  that  agreement.  Merrifield  v.  Parritt,  11 
Cush.  (Mass.)  590.  In  that  case  the  agreement  was  not 
under  seal ;  and  the  defendant  contends  that  a  sealed  in- 
strument, executed  without  previous  authority,  can  be 
ratified  only  by  an  instrument  under  seal.  However  this 
may  be  elsewhere,  b}r  the  law  of  Massachusetts  such  in- 
strument may  be  ratified  by  parol.  Cady  v.  Shepherd,  11 
Pick.  (Mass.)  400  ;  Swan  v.  Stedman,  4  Met.  (Mass.)  548  ; 
see  also  1  Am.  Leading  Cases,  4th  ed.  450 ;  Collyer  on  Part. 
3d  Am.  ed.  sec.  467 ;  Story  on  Agency,  5th  ed.  sees.  49,  51, 
242,  and  notes  ;  McDonald  v.  Eggleston,  26  Vt.  154.  The 
cases  in  which  this  doctrine  has  been  adjudged  were  those 
in  which  one  partner,  without  the  previous 'authority  of  his 
co-partners,  executed  a  deed  in  the  name  of  the  firm.  But 
we  do  not  perceive  any  reason  for  confining  the  doctrine  to 
that  class  of  cases.  .  .  . 


§  40.]  KOZEL   V.   DEARLOVE.  87 

All  the  other  rulings  and  instructions  to  which  exceptions 
have  been  alleged  we  think  were  correct ;  and  we  deem  it 
unnecessary  to  do  more  than  simply  to  affirm  them. 

Exceptions  overruled. 


§40.]  KOZEL  v.  DEARLOVE. 

144  Illinois,  23.  —  1892. 

Action  in  the  nature  of  an  action  for  specific  performance. 
The  contract  was  signed  b}'  an  agent  of  the  vendor  upon 
terms  differing  from  those  fixed  by  the  agent's  written 
authority.  The  vendor  orally  assented  to  the  terms  as 
changed.  Petition  dismissed.  Petitioner  brings  writ  ot 
error. 

Bailey,  C.  J.  .  .  .  The  only  question  presented  by  the 
record  which  we  need  consider  is,  whether  Clark  was 
authorized  to  sign  the  contract  sought  to  be  enforced,  or  a 
note  or  memorandum  thereof,  b}r  any  written  instrument 
signed  by  Dearlove,  as  required  b}-  the  second  section  of  the 
Statute  of  Frauds.  That  he  had  competent  written  authority 
to  sell  the  lots  in  question  at  certain  specified  prices,  and  upon 
certain  prescribed  terms,  is  not  disputed.  But  the  written 
instrument  gave  him  no  authority  to  sell  at  lower  prices  or 
upon  different  terms.  No  one,  we  presume,  would  claim 
that,  if  he  had  undertaken  to  do  so  without  consulting  his 
principal,  his  act  would  have  had  any  legal  validity,  or  have 
been  enforceable  against  the  principal.  The  agent  was  just  as 
powerless  to  make  such  sale  as  he  would  have  been  if  no 
written  authority  had  existed.  To  sell  upon  different  terms 
required  a  new  and  further  authority,  and  such  new  authority, 
to  be  valid  under  the  Statute  of  Frauds,  must  itself  have  been 
in  writing,  and  signed  by  the  principal. 

It  is  of  no  avail  to  show  that  the  modified  terms  were 
communicated  to  Dearlove,  and  were  assented  to  by  him, 
and  that  he  directed  the  execution  of  the  contract  on  those 


88  AGENCY  BY  RATIFICATION.  [CH.  m. 

terms.  The  authority  thus  given  to  the  agent  was  not  in 
writing,  and  so  was  not  a  compliance  with  the  requirements 
of  the  statute.  We  think  the  petition  was  properly  dismissed, 
and  the  decree  will  therefore  be  affirmed. 

Decree  affirmed. 


9.  Legality  of  act  ratified. 

§  43.]  MILFORD  BOROUGH  v.  MILFORD  WATER  CO. 
124  Pennsylvania  State,  610.  —  1889. 

Assumpsit  by  the  water  company  against  the  borough  upon 
a  contract  for  the  supply  of  water  during  the  year  1884-1885. 
Judgment  for  plaintiff.  The  borough  appeals.  When  the 
agreement  was  made  in  1875,  the  chief  burgess  and  two  of 
the  councilmen  were  officers,  and  another  of  the  councilmen 
was  a  stockholder,  in  the  plaintiff  company.  Only  two 
members  of  the  council  were  not  interested  in  the  company. 
In  subsequent  years  the  number  of  town  officers  interested 
in  the  water  company  was  less,  and  in  some  years  no  officer 
was  so  interested.  During  those  j'ears  the  borough  used 
and  paid  for  the  water.  During  1884-1885  no  member  of  the 
borough  council  was  interested  in  the  water  company,  but 
the  borough  refused  to  pa}'  for  the  water. 

Mr.  Chief  Justice  Paxson  (after  deciding  that  the 
contract  of  1875  was  void  under  the  provisions  of  a  statute 
which  made  it  a  misdemeanor,  punishable  bjr  fine  and  for- 
feiture of  office,  for  a  burgess  or  councilman  to  be  interested 
in  a  contract  for  supplies  for  the  borough).  It  appeared, 
however,  upon  the  trial  below,  that  the  borough  had  been 
using  and  paying  for  this  water  for  several  j'ears  ;  that  upon 
some  occasions  when  the  bills  were  passed  there  was  less 
than  a  majority  of  councils  who  were  members  of  the  water 
compan}7,  and  some  years  in  which  there  were  no  members 
of  councils  who  were  also  members  of  said  company.     From 


§  43.]      MTLFORD  BOROUGH  V.  MTLFORD  WATER  CO.       89 

this  it  was  urged  that  there  was  a  ratification  of  the  contract 
by  councils.  The  learned  judge  below  adopted  this  view, 
and  entered  judgment  non  obstante  on  the  verdict  in  favor 
of  the  water  company.     This  will  not  do. 

There  was  no  ratification  of  the  contract  because  there 
was  no  contract  to  ratify.  The  water  compan}-  never  con- 
tracted with  the  borough.  They  contracted  with  themselves 
to  supply  the  latter  with  water ;  to  that  agreement  the 
borough  was  not  a  party  in  a  legal  sense.  It  is  true,  the 
borough  might,  after  its  councils  had  become  purged  of 
the  members  of  the  water  company,  have  passed  an  ordi- 
nance similar  to  ordinance  No.  2,  and  thus  have  entered  into 
a  new  contract.  But  no  such  ordinance  was  passed,  and 
neither  councils  nor  the  officers  of  the  municipality  can  con- 
tract in  any  other  wa}'.  It  is  one  of  the  safeguards  of 
municipal  corporations  that  they  can  only  be  bound  by  a 
contract  authorized  by  an  ordinance  duly  passed.  The  Act 
of  1860  is  another  and  a  valuable  safeguard  thrown  around 
municipalities.  It  was  passed  to  protect  the  people  from  the 
frauds  of  their  own  servants  and  agents.  It  may  be  there 
was  no  fraud,  actual  or  intended,  in  the  present  case,  but  we 
will  not  allow  it  to  be  made  an  entering  wedge  to  destroy  the 
Act  of  1860.  Of  what  possible  use  would  that  Act  be  if  its 
violations  are  condoned,  and  its  prohibited,  criminally-con- 
demned contracts  allowed  to  be  enforced  under  the  guise  of 
an  implied  ratification?  It  is  too  plain  for  argument  that 
the  payment  by  councils  for  some  }'ears  for  water  actually 
furnished,  created  no  contract  to  accept  and  pay  for  it  in  the 
future.  Nor  was  this  suit  brought  upon  any  such  implied 
contract.  On  the  contrary  it  was  brought  upon  the  contract 
authorized  bj'  ordinance  No.  2 ;  it  has  nothing  else  to  rest 
upon,  and  with  the  destruction  of  its  foundation  the  super- 
structure crumbles. 

The  judgment   is   reversed,    and  judgment   is   now 

entered    for    the    defendant    below  non    obstante 

veredicto. 


90  AGENCY  BY  RATIFICATION.  [CH.  IIL 

§44.]  WORKMAN   w.  WRIGHT. 

33  Ohio  State,  405.  — 1878. 

Action  upon  a  promissory  note  payable  to  Workman,  and 
signed  with  the  name  of  Wright  and  one  Edington.  Wright 
denied  the  execution  of  the  note  on  his  part.  Workman  set 
up  that  Wright  had  ratified  his  signature  and  promised  to 
pa}T  the  note.    Judgment  for  defendant.    Plaintiff  brings  error. 

Wright,  J.  Under  the  pleadings  and  findings  of  the  court 
below,  it  may  be  assumed  that  the  name  of  Calvin  Wright 
was  a  forgery,  as  there  was  evidence  tending  to  show  the 
fact ;  and  we  cannot  say  that  the  conclusion  reached,  in  this 
respect,  was  clearly  against  the  testimony.  It  is  claimed, 
however,  that  his  admissions,  and  promises  to  paj'  the  note, 
ratified  the  unauthorized  signature. 

Had  Workman,  the  owner  of  the  note,  taken  it  upon  the 
faith  of  these  admissions,  or  had  he  at  all  changed  his  status 
by  reason  thereof,  such  facts  would  create  an  estoppel,  which 
would  preclude  Wright  now  from  his  defence.  .  This  appears 
from  most  of  the  authorities  cited  in  the  case.  But  no  foun- 
dation for  an  estoppel  exists.  All  these  statements  of  Wright, 
whatever  they  were,  were  made  after  Workman  became  the 
owner  of  the  paper.  Workman  did  not  act  upon  them  at 
all ;  he  was  in  no  wa}'  prejudiced  bj7  them,  nor  did  they  induce 
him  to  do,  or  omit  to  do,  anything  whatever  to  his  disad- 
vantage. But  it  is  maintained  that,  without  regard  to  the 
principle  of  estoppel,  these  admissions  and  promises  are  a 
ratification  of  the  previously  unauthorized  act,  upon  the  well- 
known  maxim,  Omnis  ratihabitio  retrotrahitur  et  mandato 
priori  ceqniparatur. 

It  is  said  that  a  distinction  exists  between  the  classes  of 
cases  to  which  this  principle  applies.  Where  the  original  act 
was  one  merely  voidable  in  its  nature,  the  principal  may 
ratify  the  act  of  his  agent,  although  it  was  unauthorized. 
But  where  the  act  was  void,  as  in  case  of  forgery,  it  is  said 


§  44.]  WORKMAN  V.   WRIGHT.  91 

no  ratification  can  be  made,  independent  of  the  principle  of 
estoppel,  to  which  we  have  alluded.  Most  of  the  authorities 
cited  by  counsel  for  plaintiff  in  error  are  of  the  first  class, 
where  the  act  was  only  voidable. 

Bank  v.  Warren,  15  N.  Y.  577,  was  where  one  partner, 
without  authority,  and  for  his  own  exclusive  benefit,  indorsed 
his  own  note  in  the  firm  name,  his  co-partner  was  held  bound 
by  subsequent  promise  to  pay  it,  without  any  independent 
consideration. 

In  Grout  v.  Be  Wolf,  1  R.  I.  393,  the  third  clause  of  the 
head  note  is,  "Where  the  person  whose  signature  is  forged, 
promises  the  forger  to  pay  the  note,  this  amounts  to  ratifica- 
tion of  the  signature,  and  binds  him."  But  an  examination  of 
the  case  shows  that  evidence  was  offered  to  prove  that  plain- 
tiff had  bought  the  paper  in  consequence  of  what  defendant 
said  to  him,  and  the  court  charged  that  if,  before  purchasing 
the  note,  plaintiff  asked  defendant  if  he  should  buy,  and  he 
was  told  he  might,  defendant  could  not  excuse  himself  on  the 
ground  of  forgery.  So  that  the  case  may  be  put  upon  the 
ground  of  estoppel,  without  relying  upon  the  ground  stated 
In  the  head  note  quoted. 

Harper  v.  Bevene,  10  La.  An.  724,  was  where  a  clerk  of 
a  house  signed  the  name  of  the  house  by  himself  as  agent. 
Defendant,  a  member  of  the  house,  afterward  took  the  note, 
corrected  its  date,  and  promised  to  pa}*  it ;  and  this  was  held 
a  ratification  to  make  him  liable.  In  this  case,  and  many 
like  it,  it  ma}'  be  remarked  that  the  agent  assumed  to  have 
authority,  and  does  the  act  under  that  belief ;  but  in  case  of 
a  forger}*,  there  is  no  such  authority  and  no  such  belief. 

The  case  of  Forsyth  v.  Day,  46  Me.  177,  involves  the 
principle  of  estoppel. 

The  cases  of  Bank  v.  Crafts,  4  Allen,  447,  and  Howard  v. 
Duncan,  3  Lansing,  175,  sustain  the  views  of  plaintiff  in 
error,  holding  that  a  forgery  may  be  ratified,  independently 
of  the  principle  of  estoppel,  and  in  the  absence  of  any 
new  consideration  for  the  ratifying  promise,  —  a  conclusion, 
however,  to  which  we  cannot  agree. 


92  AGENCY  BY  KATIFICATION.  [CH.  m. 

The  case  in  3  Lansing  is  criticised  in  3  Albany  Law 
Journal,  331. 

Upon  the  other  hand,  there  are  authorities  holding  that  a 
forger}-  cannot  be  ratified.  There  is  a  fully  considered  case 
in  the  English  Exchequer :  Brooke  v.  Hook,  3  Albany  Law 
Journal,  255 ;  24  Law  Times,  34.  This  was  a  case  where 
defendant's  name  was  forged,  and  he  had  given  a  written 
memorandum,  that  he  would  be  responsible  for  the  bill. 
Chief  Baron  Kelly  places  his  opinion  upon  the  grounds : 
(1)  That  defendant's  agreement  to  treat  the  note  as  his  own, 
was  in  consideration  that  plaintiff  would  not  prosecute  the 
forger ;  and,  (2)  that  there  was  no  ratification,  as  to  the  act 
done,  —  the  signature  to  the  note  was  illegal  and  void.  And 
though  a  voidable  act  may  be  ratified,  it  is  otherwise  when 
the  act  is  originally,  and  in  its  inception,  void.  The  opinion 
fully  recognizes  the  proposition,  that  where  acts  or  admis- 
sions alter  the  condition  of  the  holder  of  the  paper  the  party 
is  estopped,  but  it  is  necessary  that  such  a  case  should  be 
made.  It  is  further  held,  that  cases  of  ratification  are  those 
where  the  act  was  pretended  to  have  been  done  for,  or 
under  the  authority  of,  the  part}'  sought  to  be  charged,  which 
cannot  be  in  case  of  a  forger}'.  A  distinction  is  also  made 
between  civil  acts,  which  may  be  made  good  by  subsequent 
recognition,  and  a  criminal  offence,  which  is  not  capable  of 
ratification.  Baron  Martin  did  not  concur.  In  Woodruff  & 
Robinson  v.  Munroe,  33  Md.  147,  this  is  held:  "If,  in  an 
action  against  an  indorser  of  a  promissory  note  by  the  bona 
fide  holders  thereof,  it  be  shown  that  the  indorsement  was 
not  genuine,  and  the  defendant  did  not  ratify  or  sanction  it 
prior  to  the  maturity  of  the  note  and  its  transfer  to  plaintiff, 
he  is  not  liable.  But  if  he  adopted  the  note  prior  to  its 
maturity,  and  by  such  adoption  assisted  in  its  negotiations, 
he  would  be  estopped  from  setting  up  the  forgery  in  a  suit  by 
a  bona  fide  holder.  But  any  admissions,  by  the  defendant, 
made  subsequently  to  the  maturity  of  the  note,  would  not  be 
evidence  that  he  had  authorized  the  indorsement  of  his  name 
thereon."  See  also  Williams  v.  Bayley,  L.  R.  1  Appeals, 
H.  L.  200. 


§  44.]  WELLINGTON  V.   JACKSON.  93 

In  McHugh  v.  County  of  Schuylkill,  67  Pa.  St.  391,  the 
defence  to  a  bond  was  forger}'.  The  court  below  charged  that 
if  the  obligor  subsequently  approved  and  acquiesced  in  the 
forger}'  or  ratified  it,  the  bond  was  binding  on  him.  It  was 
held  that,  there  being  no  new  consideration,  the  instruction 
was  error ;  also,  that  a  contract  infected  with  fraud  was  void, 
not  merely  voidable,  and  confirmation  without  a  new  consid- 
eration was  nudum  pactum.  See  also  Negley  v.  Lindsay, 
67  Pa.  St.  217.  Daniel  recognizes  this  proposition.  2  Daniel, 
Neg.  Inst.  §  1352. 

Upon  principle  we  cannot  see  how  a  mere  promise  to  pay 
a  forged  note  can  lay  the  foundation  for  liability  of  the  maker 
so  promising,  when  the  promise  was  made,  as  it  was,  under 
the  circumstances  set  forth  in  the  record.  In  addition  to  the 
fact  that  there  are  no  circumstances  to  create  an  estoppel, 
there  was  no  consideration  for  the  promise.  Wright  received 
nothing,  and  it  is  a  simple  nudum  pactum.  The  con- 
sideration for  a  promise  may  be  either  an  advantage  to  the 
promisor  or  a  detriment  to  the  promisee,  but  here  neither 
exists.  Wright  had  signed  a  note,  and  when  the  one  in  suit 
was  shown  him,  said  he  would  pay  it,  supposing  it  to  be  the 
one  he  had  signed.  He  was  an  ignorant  man  who  could  not 
read  writing,  though  he  could  sign  his  name,  and  when  he 
saw  the  paper,  seeing  that  the  signature  spelled  his  name,  and 
being  unable  to  read  the  bod}'  of  the  instrument,  he  said  it 
was  all  right,  and  he  would  pay  it.  But  the  promise  was 
without  that  consideration  which  would  make  it  a  binding 
contract  Judgment  affirmed. 


§  44.]  WELLINGTON  v.  JACKSON. 

121  Massachusetts,  157.  — 1876. 

Contract  against  the  maker  of  a  promissory  note.  De- 
fence, that  defendant  never  made  the  note.  Judgment  for 
plaintiff,  on  the  ground  that  defendant  had  acknowledged 
the  signature.    Defendant  alleges  exceptions. 


94  AGENCY  BY  KATLFICATION.  [CH.  m. 

Gray,  C.  J.  Although  the  signature  of  Edward  H. 
Jackson  was  forged,  yet  if,  knowing  all  the  circumstances  as 
to  that  signature,  and  intending  to  be  bound  by  it,  he  ac- 
knowledged the  signature,  and  thus  assumed  the  note  as  his 
own,  it  would  bind  him,  just  as  if  it  had  been  originally 
signed  by  his  authority,  even  if  it  did  not  amount  to  an 
estoppel  in  pais.  Greenfield  Bank  v.  Crafts,  4  Allen,  447  ; 
Hartlett  v.  Tucker,  104  Mass.  336,  341.  The  answer  of  the 
jury  to  the  question  of  the  court  shows  that  they  found 
for  the  plaintiffs  upon  this  ground,  and  renders  immaterial 
the  instructions  given  or  requested  upon  the  subject  of 
estoppel.  .  .  .  Exceptions  overruled. 


10.  Legal  effects  of  ratification. 

§  46.]  DEMPSEY  v.  CHAMBERS. 

154  Massachusetts,  330.  —  1891. 

Tort,  to  recover  for  the  breaking  of  a  plate-glass  window 
in  plaintiff's  building  by  the  negligence  of  one  McCullock. 
Judgment  for  plaintiff. 

Plaintiff  ordered  coal  of  defendant.  McCullock,  without 
authority,  delivered  the  coal  in  behalf  of  defendant,  and  in 
so  doing  carelessly  broke  the  window.  Defendant,  with  full 
knowledge  of  McCullock's  act,  presented  a  bill  for  the  coal 
to  plaintiff  and  demanded  payment. 

Holmes,  J.  This  is  an  action  of  tort  to  recover  damages 
for  the  breaking  of  a  plate-glass  window.  The  glass  was 
broken  by  the  negligence  of  one  McCullock,  while  delivering 
some  coal  which  had  been  ordered  of  the  defendant  by  the 
plaintiff.  It  is  found  as  a  fact  that  McCullock  was  not  the 
defendant's  servant  when  he  broke  the  window,  but  that 
the  "deliver}'  of  the  coal  bj'  McCullock  was  ratified  by  the 
defendant,  and  that  such  ratification  made  McCullock  in  law 
the  agent  and  servant  of  the  defendant  in  the  delivery  of  the 


§  46.]  DEMPSEY  V.   CHAMBERS.  95 

coal. "  On  this  finding,  the  court  ruled, ' '  that  the  defendant, 
by  his  ratification  of  the  delivery  of  the  coal  by  McCullock, 
became  responsible  for  his  negligence  in  the  delivery  of  the 
coal."  The  defendant  excepted  to  this  ruling,  and  to  nothing 
else.  "We  must  assume  that  the  finding  was  warranted  by 
the  evidence,  a  majority  of  the  court  being  of  opinion  that 
the  bill  of  exceptions  does  not  purport  to  set  forth  all  the 
evidence  on  which  the  finding  was  made.  Therefore,  the  only 
question  before  us  is  as  to  the  correctness  of  the  ruling  just 
stated. 

If  we  were  contriving  a  new  code  to-day T  we  might  hesitate 
to  say  that  a  man  could  make  himself  a  party  to  a  bare  tort, 
in  any  case,  merely  jjj  assenting  to  it  after  it  had  been  com- 
mitted. But  we  are  not  at  liberty  to  refuse  to  carry  out  to 
its  consequences  any  principle  which  we  believe  to  have  been 
part  of  the  common  law,  simply  because  the  grounds  of 
policy  on  which  it  must  be  justified  seem  to  us  to  be  hard  to 
find,  and  probably  to  have  belonged  to  a  different  state  of 
society. 

It  is  hard  to  explain  why  a  master  is  liable  to  the  extent 
that  he  is  for  the  negligent  acts  of  one  who  at  the  time  really 
is  his  servant,  acting  within  the  general  scope  of  his  employ- 
ment. Probably  master  and  servant  are  "  fained  to  be  all 
one  person,"  by  a  fiction  which  is  an  echo  of  the  patria 
potestas  and  of  the  English  frankpledge.  Byington  v. 
Simpson,  134  Mass.  169,  170.  Fitz.  Abr.  Corone,  pi.  428. 
Possibly  the  doctrine  of  ratification  is  another  aspect  of  the 
same  tradition.  The  requirement  that  the  act  should  be 
done  in  the  name  of  the  ratifying  party  looks  that  way. 
New  England  Dredging  Co.  v.  Rockport  Granite  Co.,  149 
Mass.  381,  382 ;  Fuller  &  TrimwelVs  case,  2  Leon.  215, 
216  ;  Sext.  Dec.  5,  12,  De  Reg.  Jur.,  Keg.  9 ;  D.  43,  26,  13; 
D.  43,  16,  1,  §  14,  gloss.     See  also  cases  next  cited. 

The  earliest  instances  of  liability  by  way  of  ratification  in 
the  English  law,  so  far  as  we  have  noticed,  were  where  a 
man  retained  property  acquired  through  the  wrongful  act  of 
another.    Y.  B.  30  Ed.  I.  128  (Rolls  ed.)  ;  38  Lib.  Ass.  223, 


96  AGENCY  BY  RATIFICATION.  [CH.  m. 

pi.  9  ;  S.  C.  38  Ed.  III.  18,  Engettement  de  Garde.  See 
Plowd.  8,  ad  fin.,  27,  81;  Bract,  fol.  158  b,  159  a,  171b; 
12  Ed.  IV.  9,  pi.  23.  But  in  these  cases  the  defendant's 
assent  was  treated  as  relating  back  to  the  original  act,  and  at 
an  earl}'  date  the  doctrine  of  relation  was  carried  so  far  as  to 
hold  that,  where  a  trespass  would  have  been  justified  if  it 
had  been  done  by  the  authority  by  which  it  purported  to 
have  been  done,  a  subsequent  ratification  might  justify  it 
also.  Y.  B.  7  Hen.  IV.  34,  pi.  1.  This  decision  is  qualified 
in  Fitz.  Abr.  Bayllye,  pi.  4,  and  doubted  in  Bro.  Abr.  Tres- 
pass, pi.  86 ;  but  it  has  been  followed  or  approved  so  con- 
tinuously, and  in  so  many  later  cases,  that  it  would  be  hard 
to  deny  that  the  common  law  was  as  there  stated  by  Chief 
Justice  Gascoigne.  Godbolt,  109, 110,  pi.  129  ;  S.  C.  2  Leon. 
196,  pi.  246;  Hull  v.  Pickersgill,  1  Brod.  &  Bing.  282; 
Muskett  v.  Drummond,  10  B.  &  C.  153,  157 ;  Buron  v. 
Denman,  2  Exch.  167,  188;  /Secretary  of  State  in  Council 
of  India  v.  Kamachee  Boye  Sahaba,  13  Moore,  P.  C.  22, 
86  ;  Cheetham  v.  Mayor  of  Manchester,  L.  R.  10  C.  P.  249  ; 
Wiggins  v.  United  States,  3  Ct.  of  CI.  412. 

If  we  assume  that  an  alleged  principal,  by  adopting  an  act 
which  was  unlawful  when  done,  can  make  it  lawful,  it  fol- 
lows that  he  adopts  it  at  his  peril,  and  is  liable  if  it  should 
turn  out  that  his  previous  command  would  not  have  justified 
the  act.  It  never  has  been  doubted  that  a  man's  subsequent 
agreement  to  a  trespass  done  in  his  name  and  for  his  benefit 
amounts  to  a  command,  so  far  as  to  make  him  answerable. 
The  ratihabitio  mandato  comparatur  of  the  Roman  lawyers, 
and  the  earlier  cases  (D.  46,  3,  12,  §  4;  D.  43,  16,  1,  §  14; 
Y.  B.  30  Ed.  I.  128)  has  been  changed  to  the  dogma  osqui- 
paratur  ever  since  the  days  of  Lord  Coke.  4  Inst.  317. 
See  Bro.  Abr.  Trepass,  pi.  113;  Co.  Lit.  207  a;  Wingate's 
Maxims,  124;  Com.  Dig.  Trespass,  C,  1  ;  Eastern  Counties 
Railway  v.  Broom,  6  Exch.  314,  326,  327;  and  cases  here- 
after cited. 

Doubts  have  been  expressed,  which  we  need  not  consider, 
whether  this  doctrine  applied  to  the  case  of  a  bare  personal 


§  46.]  DEMPSEY  V.   CHAMBERS.  97 

tort.  Adams  v.  Freeman,  9  Johns.  117,  118;  Anderson 
and  Warberton,  JJ.,  in  Bishop  v.  Montague,  Cro.  Eliz.  824. 
If  a  man  assaulted  another  in  the  street  out  of  his  own  head, 
it  would  seem  rather  strong  to  say  that,  if  he  merely  called 
himself  my  servant,  and  I  afterwards  assented,  without 
more,  our  mere  words  would  make  me  a  party  to  the  assault, 
although  in  such  cases  the  canon  law  excommunicated  the 
principal  if  the  assault  was  upon  a  clerk.  Sext.  Dec.  5, 
11,  23.  Perhaps  the  application  of  the  doctrine  would  be 
avoided  on  the  ground  that  the  facts  did  not  show  an  act 
done  for  the  defendant's  benefit.  Wilson  v.  Barker,  1  Nev. 
&  Man.  409  ;  S.C.  4B.&  Ad.  614,  et  seq.;  Smith  v.  Zozo, 
42  Mich.  6.  As  in  other  cases  it  has  been  on  the  ground 
that  the}'  did  not  amount  to  such  a  ratification  as  was  neces- 
sary. Tucker  v.  Jerris,  75  Me.  184 ;  Hyde  v.  Cooper,  26 
Vt  552. 

But  the  language  generall}'  used  by  judges  and  text- 
writers,  and  such  decisions  as  we  have  been  able  to  find,  is 
broad  enough  to  cover  a  case  like  the  present  when  the  ratifi- 
cation is  established.  Perley  v.  Georgetown,  7  Gray,  464  ; 
Bishop  v.  Montague,  Cro.  Eliz.  824  ;  Saunderson  v.  Baker, 
2  Bl.  832 ;  S.  C.  3  Wils.  309  ;  Barker  v.  Braham,  2  Bl. 
866,  868 ;  S.  C.  3  Wils.  368 ;  Badkin  v.  Powell,  Cowper, 
476,  479  ;  Wilson  v.  Tumman,  6  Man.  &  G.  236,  242  ;  Lewis 
v.  Read,  13  M.  &  W.  834 ;  Buron  v.  Denman,  2  Exch.  167, 
188;  Bird  v.  Brown,  4  Exch.  786,  799  ;  Eastern  Counties 
Railway  v.  Broom,  6  Exch.  314,  326,  327 ;  Roe  v.  Birken- 
head, Lancashire,  &  Cheshire  Junction  Railway,  7  Exch. 
36,  41  ;  Ancona  v.  Marks,  7  H.  &  N.  686,  695 ;  Condit  v. 
Baldicin,  21  N.  Y.  219,  225  ;  Exum  v.  Brister,  35  Miss.  391 ; 
Galveston,  Harrisburg,  &  San  Antonio  Railway  v.  JJon- 
ahoe,  56  Texas,  162  ;  Murray  v.  Zovejoy,  2  Cliff.  191,  195  ; 
see  Lovejoy  v.  Murray,  3  Wall.  1,  9 ;  Story  on  Agency, 
§§  455,  456. 

The  question  remains  whether  the  ratification  is  estab- 
lished. As  we  understand  the  bill  of  exceptions,  McCullock 
took  on  himself  to  deliver  the  defendant's  coal  for  his  benefit 

7 


98  AGENCY  BY  RATIFICATION.  [CH.  HI. 

and  as  bis  servant,  and  the  defendant  afterwards  assented  to 
McCullock's  assumption.  The  ratification  was  not  directed 
specifically  to  McCullock's  trespass,  and  that  act  was  not  for 
the  defendant's  benefit  if  taken  by  itself,  but  it  was  so  con- 
nected with  McCullock's  employment  that  the  defendant 
Mould  have  been  liable  as  master  if  McCullock  realh'  had 
been  his  servant  when  delivering  the  coal.  We  have  found 
hardly  anything  in  the  books  dealing  with  the  precise  case, 
but  we  are  of  opinion  that  consistency  with  the  whole  course 
of  authority  requires  us  to  hold  that  the  defendant's  ratifica- 
tion of  the  employment  established  the  relation  of  master 
and  servant  from  the  beginning,  with  all  its  incidents,  in- 
cluding the  anomalous  liability  for  his  negligent  acts.  See 
Coomes  v.  Houghton,  102  Mass.  211,  213,  214;  Cooley, 
Torts,  128,  129.  The  ratification  goes  to  the  relation,  and 
establishes  it  ab  initio.  The  relation  existing,  the  master 
is  answerable  for  torts  which  he  has  not  ratified  specifically, 
just  as  he  is  for  those  which  he  has  not  commanded,  and 
as  he  ma}*  be  for  those  which  he  has  expressly  forbidden. 
In  Gibson's  case,  Lane,  90,  it  was  agreed  that,  if  strangers 
as  servants  to  Gibson,  but  without  his  precedent  appoint- 
ment, had  seized  goods  b}7  color  of  his  office,  and  afterwards 
had  misused  the  goods,  and  Gibson  ratified  the  seizure,  he 
thereby  became  a  trespasser  ab  initio,  although  not  privy  to 
the  misusing  which  made  him  so.  And  this  proposition  is 
stated  as  law  in  Com.  Dig.  Trespass,  C,  1  ;  Elder  v.  Bemis, 
2  Met.  599,  605.  In  Coomes  v.  Houghton,  102  Mass.  211, 
the  alleged  servant  did  not  profess  to  act  as  servant  to  the 
defendant,  and  the  decision  was  that  a  subsequent  payment 
for  his  work  by  the  defendant  would  not  make  him  one.  For 
these  reasons,  in  the  opinion  of  a  majority  of  the  court,  the 
exceptions  must  be  overruled. 

Exceptions  overruled 


§  48.]  GELATT  V.   RIDGE.  99 


§48.]  GELATT  v.  RIDGE. 

117  Missouri,  553.  — 1893. 

Action  to  recover  compensation  for  services  as  a  real- 
estate  agent.     Judgment  for  plaintiff.     Defendant  appeals. 

Plaintiff  was  authorized  to  sell  defendant's  land  upon  pre- 
scribed terms.  He  sold  with  some  variation  from  those 
terms.  Defendant  at  first  refused  to  carry  out  the  sale  as 
made,  but  later  did  so  upon  the  purchaser's  making  some 
slight  concessions. 

Macfarlane,  J.  (omitting  other  matters).  It  is  next  con- 
tended that  there  can  be  no  recover}*,  for  the  reason  that  the 
contract  made  by  the  agent  varied  from  the  terms  of  his 
authority,  and  that  this  would  be  the  case  though  the  terms 
of  the  sale  made  were  more  advantageous  to  the  principal 
than  was  required  under  the  letter  of  authority.  There  is 
no  doubt,  as  a  general  principle  of  law,  that  an  agent  must 
act  within  the  terms  of  his  authority,  and  a  substantial 
variance  therefrom  would  defeat  his  right  to  compensation, 
though  such  variance  may  have  been  advantageous  to  his 
principal.  Nesbitt  v.  Helser,  49  Mo.  383.  Yet  it  is  equally 
well  settled  that  if  the  principal  ratify  the  contract  made 
by  the  agent,  the  substituted  terms  become  a  part  of  the 
original  agreement  and  can  be  enforced  as  such.  Woods 
v.  Stephens,  46  Mo.  555,  and  cases  cited. 

The  evidence  tends  to  prove  —  indeed  it  is  very  conclu- 
sive —  that  defendant  did  fully  approve  and  ratify  the  terms 
of  sale  as  made  by  plaintiff,  and  under  the  instructions  the 
jury  must  have  so  found. 

The  suit  was  not  upon  a  quantum  meruit,  as  claimed  by 
defendant,  but  was  upon  the  original  contract  as  made  and 
supplemented  by  the  ratification  and  acceptance  of  defend- 
ant. If,  as  before  stated,  the  departure,  by  the  agent,  from 
the  terms  of  the  authority  given  him,  became,  upon  approval 


100  AGENCY  BY  RATIFICATION.  [CH.  HL 

and  ratification  by  the  principal,  a  part  of  the  original  con- 
tract, the  compensation,  if  fixed  therein,  should  be  measured 
thereunder.    Nesbitt  v.  Helser,  supra.  .  .  . 

Judgment  affirmed. 


§  48.]  BRAY  v.  GUNN. 

53  Georgia,  144.  — 1874. 

Action  against  defendant,  as  agent,  for  damages  resulting 
from  his  violation  of  instructions.    Judgment  for  defendant. 

Plaintiffs  sent  defendant  a  draft  for  collection  with  in- 
structions. Defendant  collected,  but  did  not  obey  instruc- 
tions as  to  the  currency  in  which  payment  should  be  received. 
Defendant  informed  plaintiffs  of  what  he  had  done,  and 
plaintiffs  did  not  dissent. 

McCay,  J.  If  an  agent,  acting  in  good  faith,  disobey 
the  instructions  of  his  principal,  and  promptly  informs  the 
principal  of  what  he  has  done,  it  is  the  duty  of  the  principal, 
at  the  earliest  opportunity,  to  repudiate  the  act  if  he  disap- 
prove. Silence  in  such  a  case  is  a  ratification.  See  the  case 
of  McLendon  v.  Wilson  &  Callaway,  52  Ga.  41,  from  Troup 
County.  Taking  this  correspondence  altogether,  we  think 
the  jury  had  a  right  to  find  that  the  plaintiffs  were  satisfied 
with  the  act  of  Gunn  in  taking  the  money  in  the  Kimball 
funds,  and  that  their  dissatisfaction  is  an  afterthought  in  con- 
sequence of  the  failure  of  Kimball.  The  evidence  is  con- 
vincing that  if  they  had  promptly  notified  Gunn  of  their 
dissatisfaction,  he  could  have  saved  himself.  Both  the 
parties  here  were  commercial  men,  and  the  rule  is  a  fair  and 
reasonable  one  that  it  is  the  duty  of  the  principal  promptly 
to  answer  the  letters  of  his  agent,  and  if  he  do  not  do  so  he 
is  presumed  to  acquiesce  in  what  the  agent  informs  him  he 
has  done  or  proposes  to  do. 

Judgment  affirmed. 


CHAPTER  IV. 

FORMATION  OF  THE  RELATION  BY  ESTOPPEL. 

§  52.]  BRONSON'S  EXECUTOR  v.  CHAPPELL. 
12  Wallace  (U.  S.),  681.  —  1870. 

Bill  to  foreclose  a  mortgage.  Defence,  payment  to  com- 
plainant's agent.     Bill  dismissed.     Complainant  appeals. 

Mr.  Justice  Swayne  delivered  the  opinion  of  the  court 

But  a  single  question  has  been  argued  in  this  court,  and 
that  is  one  arising  upon  the  facts  as  developed  in  the  record. 
This  opinion  will  be  confined  to  that  subject. 

William  C.  Bostwick,  acting  for  Frederick  Bronson,  nego- 
tiated the  sale  of  a  tract  of  land  in  Wisconsin  to  the  defend- 
ants. According  to  his  custom  in  such  cases,  Bronson 
forwarded  to  Bostwick  the  draft  of  a  contract  to  be  executed 
by  the  buyers.  At  the  foot  of  the  draft  was  a  note  in  these 
words  :  — 

"William  C.  Bostwick,  Esq.,  of  Galena,  is  authorized  to 
receive  and  receipt  for  the  first  payment  on  this  contract. 
All  subsequent  payments  to  be  made  to  F.  Bronson,  in  the 
city  of  New  York." 

The  defendants  expressed  to  Bostwick  a  preference  to 
receive  a  deed  and  give  a  mortgage.  This  was  communi- 
cated to  Bronson,  who  acceded  to  the  proposition,  and 
forwarded  to  Bostwick  a  deed  and  the  draft  of  a  bond  and 
mortgage.  On  the  25th  of  March,  1865,  the  defendants 
paid  to  Bostwick  $1500  of  the  purchase  money,  and  executed 
the  bond  and  mortgage  to  secure  the  payment  of  the  balance. 
According  to  the  condition  of  the  bond  it  was  to  be  paid  to 
the  obligee  in  the  city  of  New  York,  in  instalments,  as  fol- 
lows:   $781.20   on  the  13th  of  November,   1865,  and  the 


102  AGENCY  BY  ESTOPPEL.  [CH.  IV. 

remaining  sum  of  $4562.40  in  seven  equal  annual  payments, 
from  the  12th  of  February,  1865,  with  interest  thereon  at 
the  rate  of  7  per  cent,  per  annum.  The  contract  was  erro- 
neously construed  03*  Bronson  as  requiring  the  interest  on 
all  the  instalments  to  be  paid  with  each  one  as  it  fell  due. 
The  other  parties  seem  to  have  acquiesced  in  this  construc- 
tion. On  the  4th  of  December,  1865,  the  defendants  paid  to 
Bostwick,  as  the  agent  of  Bronson,  $825.36,  in  discharge  of 
the  amount  claimed  to  be  due  on  the  30th  of  November, 
1865,  and  took  his  receipt  accordingly.  On  the  28th  of 
February,  1866,  they  paid  Bostwick  $980  to  meet  the  second 
instalment  and  interest,  as  claimed,  with  exchange,  and  took 
his  receipt  as  before.  Bostwick  failed  in  December,  1866. 
These  moneys  were  never  paid  over  to  Bronson.  He  denied 
the  authority  of  Bostwick  to  receive  them,  and  demanded 
payment  from  the  defendants.  The}*  refused,  and  Bronson 
thereupon  filed  this  bill  to  foreclose  the  mortgage.  The 
validity  of  these  payments  is  the  question  presented  for  our 
determination. 

Agents  are  special,  general,  or  universal.  Where  written 
evidence  of  their  appointment  is  not  required,  it  may  be 
implied  from  circumstances.  These  circumstances  are  the 
acts  of  the  agent  and  their  recognition,  or  acquiescence  by 
the  principal.  The  same  considerations  fix  the  category  of 
the  agencj*  and  the  limits  of  the  authority  conferred.  Where 
one,  without  objection,  suffers  another  to  do  acts  which  pro- 
ceed upon  the  ground  of  authority  from  him,  or  by  his  con- 
duct adopts  and  sanctions  such  acts  after  they  are  done, 
he  will  be  bound,  although  no  previous  authority  exist,  in  all 
respects  as  if  the  requisite  power  had  been  given  in  the  most 
formal  manner.  If  he  has  justified  the  belief  of  a  third  part}* 
that  the  person  assuming  to  be  his  agent  was  authorized  to 
do  what  was  done,  it  is  no  answer  for  him  to  say  that  no 
authority  had  been  given,  or  that  it  did  not  reach  so  far,  and 
that  the  third  party  had  acted  upon  a  mistaken  conclusion. 
He  is  estopped  to  take  refuge  in  such  a  defence.  If  a  loss 
is  to  be  borne,  the  author  of  the  error  must  bear  it.     If 


§  52.]   bkonson's  executor  v.  chappell.    103 

business  has  been  transacted  in  certain  cases,  it  is  implied 
that  the  like  business  may  be  transacted  in  others.  The 
inference  to  be  drawn  is,  that  everything  fairly  within  the 
scope  of  the  powers  exercised  in  the  past  ma}'  be  done  in 
the  future,  until  notice  of  revocation  or  disclaimer  is  brought 
home  to  those  whose  interests  are  concerned.  Under  such 
circumstances  the  presence  or  absence  of  authority  in  point 
of  fact,  is  immaterial  to  the  rights  of  third  persons  whose 
interests  are  involved.  The  seeming  and  reality  are  followed 
by  the  same  consequences.  In  either  case  the  legal  result 
is  the  same. 

(After  giving  the  correspondence  between  Bronson  and 
Bostwick.)     This  correspondence  suggests  several  remarks : 

Bostwick  speaks  of  his  employment  as  having  been,  and 
then  being,  an  "  agency  "  for  Bronson.  He  inquires  whether 
it  was  contemplated  by  Bronson  to  revoke  it.  Bronson  does 
not  den}'  or  revoke  it.  He  says  the  object  of  the  memorandum 
was  to  repel  the  construction  that  the  receipt  of  "  the  first  or 
other  payments  by  the  agent"  was  u  an  implied  waiver  of 
the  claim  for  exchange,"  and  which  was  the  same  thing  in 
effect,  —  a  waiver  of  the  stipulation  in  the  contract  that  the 
money  was  to  be  paid  to  him  "  in  the  city  of  New  York."  It 
recognizes  the  authority  of  the  agent  to  receive  the  subsequent 
payments  as  well  as  the  first  one,  provided  exchange  were 
paid  upon  the  former  by  the  debtor. 

The  language  employed  by  Bronson  will  admit  of  no  other 
construction.  It  applies  with  full  force  to  the  bond  of  these 
defendants.  They  paid  exchange  as  well  as  the  principal  and 
interest  of  the  instalments  in  question.  There  is  no  evidence 
in  the  record  that  the  authority  thus  admitted  to  exist  was 
ever  withdrawn.  It  must  be  presumed  to  have  continued 
until  the  relations  of  the  parties  were  terminated  by  Bost- 
wick's  failure  and  insolvency.  Bostwick  says  in  his  deposi- 
tion :  "  I  advertised  myself  as  the  agent  of  the  Bronson  lands, 
which  advertising  was  continued  for  a  period  of  twelve  or 
fourteen  years."  His  testimony  upon  this  subject  is  uncon- 
tradicted. 


104  AGENCY  BY  ESTOPPEL.  [CH.  IV. 

There  are  found  in  the  record  thirty-four  letters  from 
Bronson  to  Bostwick,  all  relating  to  business  connected  with 
the  Bronson  lands.  The  first  letter  bears  date  on  the  12th 
of  December,  1855,  the  last  one  on  the  27th  of  November, 
1865.  The}'  are  in  all  respects  such  as  would  naturally  be 
rddressed  by  a  principal  to  an  agent  in  whose  judgment,  in- 
tegrity, and  diligence  he  had  the  fullest  confidence.  They 
refer  to  sales,  to  the  delivery  of  deeds  and  contracts,  the  pay- 
ment and  collection  of  taxes,  and  a  variety  of  other  matters 
in  the  same  connection.  Ten  of  the  letters  authorize  the 
delivery  of  contracts  on  the  receipt  of  the  first  payment  by 
Bostwick.  Fourteen  of  them  authorize  the  collection,  or 
acknowledge  the  transmission,  of  other  moneys.  Bronson 
was  absent  in  Europe  from  the  9th  of  October,  1861,  until 
about  the  middle  of  December,  1864.  During  that  time  his 
business  was  attended  to  by  his  attorney,  E.  S.  Smith,  Esq., 
of  the  city  of  New  York.  There  are  in  the  record  twent}'- 
one  letters  from  him  to  Bostwick.  They  are  of  the  same 
character  with  those  from  Bronson.  Twelve  of  them  acknowl- 
edge the  collection  and  transmission  of  moneys  for  Bostwick. 
It  is  not  stated  whether  they  were  the  first  or  later  payments. 
But  the  circumstances  show  clearly  that  they  were  in  most, 
if  not  in  all  instances,  of  the  latter  character.  All  collections 
were  made,  and  all  business  relating  to  the  lands  was  trans- 
acted through  Bostwick.  In  one  of  these  letters,  Smith 
says  :  — 

"  P.  S.  — Mr.  Bronson,  in  a  letter  received,  writes  :  '  I  am 
willing  to  sell  lands  through  Mr.  Bostwick  upon  an  advance 
of  price  equal  to  the  depreciation  of  paper  money  at  the  time 
of  sale,' "  &c. 

A  further  analysis  of  the  letters  of  these  parties  would 
develop  a  large  array  of  additional  facts  bearing  in  the  same 
direction  and  hardly  less  cogent  than  those  to  which  we  have 
adverted.  There  is  no  intimation  in  any  of  them  that  Bost- 
wick was  regarded  as  the  agent  of  the  bujTers,  that  he  was 
not  regarded  as  the  agent  of  Bronson,  or  that  he  had  in  any 
instance  exceeded  his  authorfty.    It  is  unnecessary  to  pursue 


§  52.]  JOHNSON  V.   HURLEY.  105 

the  subject  further.     Viewed  in  the  light  of  the  law,  we  think 
the  evidence  abundantly  establishes  two  propositions :  — 

1.  That  Bostwick  was  the  agent  of  Bronson,  and  as  such 
authorized  to  receive  the  payments  in  question. 

2.  If  this  were  not  so,  that  the  conduct  of  Bronson  — 
numerous  transactions  between  him  and  Bostwick,  and  the 
course  of  business  by  the  latter,  authorized  or  known  to 
and  acquiesced  in  by  the  former  —  justified  the  belief  by  the 
defendants  that  Bostwick  had  such  authority  and  that  Bron- 
son was  bound  accordingly. 

Decree  affirmed. 


§  52.]  JOHNSON  v.  HURLEY.    C{.  &  Ojy^^l  &7 

115  Missouri,  513.  — 1893. 

Ejectment.  Equitable  defence,  which  was  tried  as  a  suit 
for  specific  performance.    Decree  for  defendant. 

Macfarlane,  J.  The  suit  is  ejectment  to  recover  posses- 
sion of  the  northwest  quarter,  section  5,  township  53,  range 
7,  in  Ralls  County.  The  answer  set  up  an  equitable  defence 
to  the  effect  that  defendant  had  purchased  the  land  from  the 
duly  authorized  agent  of  the  plaintiffs,  had  received  from 
said  agent  deeds  purporting  to  be  duly  executed  and  acknowl- 
edged by  plaintiffs  and  purporting  to  convey  to  him  said 
lands ;  that  he  had  paid  to  said  agent  the  entire  purchase 
price  for  the  land,  to  wit,  $1,650,  its  fair  value,  and  had  been 
put  in  possession  under  his  said  purchase ;  that  he  had  in 
good  faith  fenced  said  land  and  erected  thereon  a  dwelling- 
house  and  other  valuable  and  permanent  buildings  and  im- 
provements, and  pra3'ed  specific  performance.  The  reply 
denied  the  new  matter  of  the  answer. 

The  cause  was  tried  as  a  suit  in  equity  for  specific  per- 
formance of  a  contract  for  the  conveyance  of  land,  and  a 
decree  entered  for  defendant  according  to  the  prayer  of  the 
answer,  and  plaintiffs  appealed. 


106  AGENCY  BY   ESTOPPEL.  [CH.  IV. 

The  evidence  showed  that  .  .  .  Finlay  A.  Johnson,  as- 
suming to  act  as  the  agent  of  plaintiff's  and  their  sister 
Phoebe,  sold  to  defendant  the  east  half  of  said  northwest 
quarter  for  the  sum  of  8800,  and  afterwards,  on  January  10, 
1882,  he  sold  him  the  west  half  of  said  quarter  for  the  sum 
of  $850 ;  that  defendant  paid  the  purchase  money  to  the  said 
Finlay  A.  Johnson  at  the  respective  dates  of  sale,  and 
received  from  him  deeds  purporting  to  be  signed  and  ac- 
knowledged by  plaintiffs  and  said  Phoebe.  Under  these 
purchases  defendant  went  into  possession  of  the  land,  which 
was  then  unimproved,  fenced  it,  built  a  dwelling-house  and 
other  buildings  thereon,  and  reduced  it  to  cultivation. 

The  evidence  further  showed  that  the  deeds  and  the  ac- 
knowledgments were  forged  by  the  said  Finlay  A.,  and  that 
plaintiffs  never  knew  that  contracts  or  deeds  had  been  made, 
or  that  money  had  been  paid  their  agent,  until  1884,  after  he 
had  absconded. 

The  question  is  whether  these  sales  made  b}r  their  agent 
were  binding  on  plaintiffs. 

I.  The  evidence  leaves  no  doubt  that  plaintiffs'  agent 
made  the  contracts  with  defendant  for  the  sale  of  the  land, 
assuming  to  act  for  them ;  that  he  received  the  purchase 
money,  delivered  a  deed  to  which  their  names  were  signed, 
and  to  which  an  acknowledgment,  certified  in  due  form  by 
the  said  agent  as  notary  public,  was  attached  ;  and  that 
under  said  transaction,  and  relying  on  it,  defendant  in  good 
faith  went  into  the  possession  and  made  valuable  and  last- 
ing improvements.  Under  these  circumstances,  if  said  agent 
was  authorized  to  make  the  sale,  it  would  be  the  grossest 
injustice  and  fraud  on  defendant  to  deny  him  the  benefit 
of  the  contract  for  the  reason  that  it  was  not  in  writing  as 
required  b}'  the  Statute  of  Frauds.  To  prevent  such  injus- 
tice courts  of  equity  have  uniformly  held  that  such  part  per- 
formance relieves  the  contract  of  the  infirmity  created  by 
the  statute,  and  specific  performance  will  not  be  denied. 
Emmel  v.  Hayes,  102  Mo.  186  ;  Howies  v.  Wathan,  54  Mo. 
261. 


§  52.]  JOHNSON  V.   HURLEY.  107 

II.  The  question  then  is,  whether  Fiulay  A.  Johnson  had 
authority  from  plaintiffs  to  make  a  sale  of  these  lands. 

It  may  be  stated,  in  the  first  place,  as  a  general  rule,  that 
an  agent  can  only  act  within  the  circumscribed  authority 
given  him  by  his  principal ;  and  one  who  deals  with  him  is 
put  upon  his  guard  by  the  very  fact  that  he  is  dealing  with1 
an  agent,  and  he  must  ascertain  for  himself  the  nature  and 
extent  of  his  authority.  The  burden  is,  therefore,  always  cast 
upon  one  claiming  the  benefit  of  a  contract  made  with  an- 
other who  assumes  to  act  as  the  agent  of  a  third  person,  toj 
establish  by  satisfactory  evidence  that  the  contract  relied; 
upon  was  within  the  scope  of  the  agent's  authority.  Mechem 
on  Agenc}',  sees.  276-289,  and  cases  cited. 

III.  The  evidence,  we  think,  fails  to  establish  an  express 
authority  from  the  plaintiffs  to  the  said  Finlay  A.  Johnson  to 
conclude  contracts  for  the  sale  of  these  Missouri  lands,  or  to 
make  the  particular  contract  in  question.  Both  of  them  in 
testifying  in  the  case  very  emphatically  deny  such  author- 
ity, and  no  evidence  was  introduced  b}'  defendant  showing 
directl}-  that  any  was  given.  The  authority,  then,  if  an}-  ex- 
isted, must  be  implied  or  presumed  from  the  conduct  of  the 
parties. 

The  general  rule,  which  accords  with  the  decisions  in  this 
State,  is  given  by  Mechem  in  his  work  on  Agency,  as  fol- 
lows :  "  It  may  therefore  be  stated  as  a  general  rule  that, 
whenever  a  person  has  held  out  another  as  his  agent  author- 
ized to  act  for  him  in  a  given  capacity,  or  has  knowingly  and 
without  dissent  permitted  such  other  to  act  as  his  agent  in 
such  capacity ;  or  where  his  habits  and  course  of  dealing 
have  been  such  as  to  reasonably  warrant  the  presumption 
that  such  other  was  his  agent  authorized  to  act  in  that  capa- 
city, whether  it  ha  in  a  sinalo  transaction  or  in  a  series  of 
transactions.  hfaMMffiflflfc  to  such  other  to  act  for  him  in 
that  capacity  willjbe  coiiclusivelv-pvpsnmed,  so  far  as  it  may 
be  necessary  tojjrotect  the  rights  of  third  persons  who  have 
relied  thereon  in  good  faith  and  in  the  exercise  of  reasonable 
prudence,  and  he  will  not  be  permitted  to  den}'  that  such 


10$  AGENCY  BY  ESTOPPEL.  [CH.  IV. 

other  was  his  agent,  authorized  to  do  the  act  that  he  assumed 
to  do,  provided  that  such  act  is  within  the  real  or  apparent 
scope  of  the  presumed  authority."  Rice  v.  Groffmann,  56 
Mo.  434  ;  SummerviUe  v.  Railroad,  62  Mo.  391. 

We  are  of  the  opinion  that  authority  to  make  these  sales 
is  clearly  implied  from  the  conduct  of  the  parties.  One  of 
the  owners  of  the  land,  a  preacher,  lived  in  the  State  of 
Illinois ;  the  other  two,  unmarried  ladies,  lived  in  the  State 
of  New  Jersey.  So  far  as  appears,  no  one  of  them  ever 
visited  the  land  or  gave  any  personal  attention  to  it.  From 
1868  to  1883  it  was  in  the  hands  of  agents  for  sale.  For 
most  of  this  time  the  said  Finlay  A.  Johnson,  a  son  of  one 
of  the  owners  and  a  nephew  of  the  other  two,  a  lawyer,  a 
notary  public  and  judge  of  a  court,  who  lived  in  the  State  of 
New  Jersey,  was  one  of  the  agents.  The  acknowledgment 
of  deeds  was  made  before  him  ;  he  paid  taxes ;  he  delivered 
deeds  to  purchasers ;  he  collected  purchase  money ;  took 
notes  and  deeds  of  trust  in  his  own  name  for  deferred  pay- 
ments ;  he  removed  other  local  agents,  and  made  settle- 
ments with  them ;  he  was,  in  fact,  for  j*ears  the  medium 
through  whom  all  the  business  was  transacted. 

The  manner  in  which  this  business  was  transacted  through 
this  agent  for  ten  or  more  }*ears  was  known  in  the  community 
and  to  defendant.  All  inquiries  in  regard  to  the  land  were 
made  of  this  agent ;  prices  were  given  by  him ;  purchase 
money  paid  to  and  deeds  received  from  him ;  lands  leased 
and  rents  collected  by  him,  —  and  all  under  express  author- 
ity. There  was  also  evidence  that  a  former  agent,  the  one 
removed  by  Finlay  A.,  made  sales  and  executed  contracts 
upon  which  plaintiffs  afterwards  made  deeds.  That  agent 
was  removed  for  withholding  money,  and  Finlaj-  A.  was 
appointed,  with  express  authority  to  collect  purchase  money. 
Why  this  agent,  with  all  these  express  powers,  should  have 
been  restricted  only  in  the  matter  of  making  sales,  is  not 
explained  by  the  evidence. 

We  think  the  conduct  of  plaintiffs  in  the  transaction  of  this 


§  52.]  DEEW  V.  NTJNN.  109 

business  such  as  would  reasonably  have  induced  defendant 
to  believe  that  the  agent  with  whom  he  dealt  had  authority 
to  make  the  sales :  and  after  having  acted  upon  that  belief, 
paid  the  purchase  price,  and  expended  large  sums  in  improve- 
ments, plaintiffs  will  not  now  be  heard  to  dispute  the 
authority. 

We  are  well  satisfied  with  the  conclusions  reached  by  the 
circuit  judge,  and  affirm  the  judgment  All  concur,  except 
Barclay,  J.,  who  is  absent 


§  52.]  BRADISH  v.   BELKNAP  et  al. 

41  Vermont,  172.  —  1868. 
[Reported  herein  at  p.  135.] 

§52.]  DREW  v.  NUNN. 

L.  R.  4  Queen's  Bench  Division  (C.  A.),  661.  — 1879. 
[Reported  herein  at  p.  24.] 


CHAPTER  V. 

FORMATION  OF  THE  RELATION  BY  NECESSITY. 

§  55.]  BENJAMIN  v.   DOCKHAM. 

134  Massachusetts,  418.  —  1883. 

Holmes,  J.  The  plaintiff's  declaration  was  for  milk  de- 
livered to  the  defendant  by  the  plaintiff  at  the  defendant's 
request.  His  proof  was  of  a  delivery  to  the  defendant's  wife, 
who  was  living  apart  from  her  husband,  without  means  of 
support,  by  reason  of  his  cruelty.  The  only  ground  of  ex- 
ception which  we  are  asked  to  consider  is,  that  there  was  a 
variance  between  the  declaration  and  proof.  If  there  were 
such  a  variance,  as  the  case  has  been  tried  on  its  merits,  and 
it  appears  from  the  statement  of  the  defendant's  counsel  him- 
self that  there  can  have  been  no  surprise,  an  amendment 
would  be  allowed.  Peck  v.  Waters,  104  Mass.  345,  351  ; 
Cleaves  v.  Lord,  3  Gray,  66.  But  we  think  no  amendment  is 
necessary.  The  allegation  of  delivery  to  the  defendant  would 
seem  to  be  sufficient  in  a  common  court,  even  when  the  de- 
liver)' was  to  a  third  person  at  the  defendant's  request. 
Bull  v.  Sibbs,  8  T.  R.  327,  328  ;  2  Chitty  PI.  (7th  ed.)  47,  n. 
I ;  (6th  ed.)  56,  n.  w.  A  fortiori  when  it  was  to  the  defend- 
ant's wife,  who  at  common  law  is  one  person  with  her  hus- 
band. Boss  v.  Noel, Bull.  N.  P.  136;  Bamsclenv.  Ambrose, 
1  Stra.  127.  And  in  those  cases  where  the  law  authorizes 
a  wife  to  pledge  her  husband's  credit,  even  against  his  will, 
it  creates  a  compulsory  agency,  and  her  request  is  his 
request. 

Exceptions  overruled 


§  59.]         TERRE  HAUTE  &  I.  R.  CO.  V.  McMURRAY.        Ill 


§  59.]   TERRE  HAUTE  AND   INDIANAPOLIS 
RAILROAD  CO.  v.  McMURRAY. 

98  Indiana,  358.  — 1884. 

Action  for  compensation  for  services  as  surgeon.  Judg- 
ment for  plaintiff.     Defendant  appeals. 

Elliott,  J.  The  facts  in  this  case  are  simple,  and  lie 
within  a  narrow  compass,  but  the  questions  of  law  are  impor- 
tant and  difficult. 

Frankfort  is  a  way  station  on  the  line  of  appellant's  road, 
distant  many  miles  from  the  principal  offices  of  the  company 
and  from  the  residences  of  its  chief  officers.  At  this  station, 
at  one  o'clock  of  the  morning  of  July  2,  1881,  Thomas 
Coon,  a  brakeman  in  the  service  of  the  appellant,  had  his  foot 
crushed  between  the  wheel  of  a  car  of  the  train  on  which  he 
was  employed  as  a  brakeman,  and  the  rail  of  the  track.  The 
injury  was  such  as  demanded  immediate  surgical  attention. 
The  conductor  of  the  train  requested  the  appellee,  who  was  a 
surgeon,  residing  in  the  town  of  Frankfort,  to  render  the 
injured  man  professional  aid,  and  informed  the  appellee  tbat 
the  company  would  pay  him  for  such  services.  At  the  time 
the  accident  happened,  and  at  the  time  the  surgeon  was 
employed,  there  was  no  officer  superior  to  the  conductor  at 
the  town  of  Frankfort.  There  was  at  the  station  a  resident 
agent  who  had  full  knowledge  of  the  injury  to  Coon,  and  of 
appellee's  employment.  This  agent  was  in  telegraphic  com- 
munication with  the  principal  officers  of  the  company,  but  did 
not  communicate  with  them.  The  trial  court  held  the  appel- 
lant liable  for  the  reasonable  value  of  the  services  rendered 
bj'  the  appellee,  and  awarded  him  $100. 

In  ordinary  cases,  a  conductor  or  other  subordinate  agent 
has  no  authority  to  employ  surgical  assistance  for  a  ser- 
vant of  the  corporation  who  receives  an  injury  or  becomes 
ill.  We  do  not  doubt  that  the  general  rule  is  that  a  conductor 
has  no  authority  to  make  contracts  with  surgeons,  and  if  this 
principle  governs  all  cases  the  discussion  is  at  an  end ;  but 


112  AGENCY  BY  NECESSITY.  [CH.  V. 

we  do  not  think  it  does  rule  every  case,  for  there  may  be 
cases  so  strongly  marked  as  to  constitute  a  class  in  them- 
selves and  one  governed  by  a  different  rule. 

The  authority  of  an  agent  is  to  be  determined  from  the 
facts  of  the  particular  case.  Facts  may  exist  which  will 
greatly  broaden  or  greatly  lessen  an  agent's  authority.  A 
conductor's  authority  in  the  presence  of  a  superior  agent, 
ma}'  dwindle  into  insignificance ;  while  in  the  absence  of  a 
superior  it  may  become  broad  and  comprehensive.  An 
emergency  may  arise  which  will  require  the  corporation  to 
act  instantly,  and  if  the  conductor  is  the  only  agent  present, 
and  the  emergency  is  urgent,  he  must  act  for  the  corporation, 
and  if  he  acts  at  all,  his  acts  are  of  just  as  much  force  as  those 
of  the  highest  officer  of  the  corporation.  In  this  instance  the 
conductor  was  the  highest  officer  on  the  ground  ;  he  was  the 
sole  representative  of  the  corporation  ;  he  it  was  upon  whom 
devolved  the  duty  of  representing  the  corporation  in  matters 
connected  within  the  general  line  of  his  dut}-  in  the  sudden 
emergency  which  arose  out  of  the  injury  to  the  fellow-servant 
immediately  under  his  control;  either  he,  as  the  superior 
agent  of  the  company,  must,  in  such  cases,  be  its  representa- 
tive, or  it  has  none.  There  are  cases  where  the  conductor  is 
the  only  representative  of  the  corporation  that  in  the  emer- 
gency it  can  possibly  have.  There  are  cases,  where  the 
train  is  distant  from  the  supervision  of  superior  officers, 
where  the  conductor  must  act,  and  act  for  the  company,  and 
where,  for  the  time,  and  under  the  exigencies  of  the  occasion, 
he  is  its  sole  representative,  and  if  he  be  its  only  representa- 
tive, he  must,  for  the  time  and  the  exigency,  be  its  highest 
representative.  Simple  examples  will  prove  this  to  be  true. 
Suppose,  for  illustration,  that  a  train  is  brought  to  a  halt  by 
the  breaking  of  a  bolt,  and  that  near  by  is  a  mechanic  who 
can  repair  the  broken  bolt  and  enable  the  train  to  proceed  on 
its  way,  ma}*  not  the  conductor  employ  the  mechanic? 
Again,  suppose  a  bridge  is  discovered  to  be  unsafe,  and  that 
there  are  timbers  at  a  neighboring  mill  which  will  make  it 
safe,  may  not  the  conductor,  in  behalf  of  his  principal,  em- 


§  59.]         TERRE  HAUTE  &  I.  R.  CO.  V.  McMURRAY.        113 

ploy  men  to  haul  the  timber  to  the  bridge  ?  Once  more,  sup- 
pose the  engineer  of  a  locomotive  to  be  disabled,  and  that  it 
is  necessary  to  at  once  move  the  train  to  avoid  danger,  and 
there  is  near  by  a  competent  engineer,  may  not  the  conductor 
employ  him  to  take  the  train  out  of  danger?  In  these  ex- 
amples we  mean  to  include,  as  a  silent  factor,  the  fact  that 
there  is  an  emergency,  allowing  no  time  for  communicating 
with  superior  officers,  and  requiring  immediate  action.  If  it 
be  true  that  there  are  cases  of  pressing  emergency  where  the 
conductor  is  on  the  special  occasion  the  highest  representa- 
tive of  the  compan}',  then  it  must  be  true  that  he  may  do,  in 
the  emergency,  what  the  chief  officer,  if  present,  might  do. 
If  the  conductor  is  the  only  agent  who  can  represent  the 
company,  then  it  is  inconceivable  that  he  should,  for  the 
purposes  of  the  emergency,  and  during  its  existence,  be 
other  than  the  highest  officer.  The  position  arises  with 
the  emergenc}7,  and  ends  with  it.  The  authority  incident  to 
the  position  is  such,  and  such  only,  as  the  emergency  im- 
peratively creates. 

Assuming,  as  we  may  justly  do,  that  there  are  occasions 
when  the  exigency  is  so  great,  and  the  necessity  so  pressing, 
that  the  conductor  stands  temporarity  as  the  representative  of 
the  compan}-,  with  authorit}'  adequate  to  the  urgent  and  imme- 
diate demands  of  the  occasion,  we  inquire  what  is  such  an 
emergenc}'  as  will  clothe  him  with  this  authorit}'  and  put  him  in 
the  position  designated.  Suppose  that  a  locomotive  is  over- 
turned upon  its  engineer,  and  he  is  in  immediate  danger  of 
great  bodily  harm,  would  it  not  be  competent  for  the  con- 
ductor to  hire  a  derrick,  or  a  lifting  apparatus,  if  one  were 
near  at  hand,  to  lift  the  locomotive  from  the  body  of  the 
engineer?  Surely  some  one  owes  a  duty  to  a  man,  imperilled 
as  an  engineer  would  be  in  the  case  supposed,  to  release  him 
from  peril ;  and  is  there  any  one  upon  whom  this  duty  can  be 
so  justly  put  as  upon  his  employer?  The  man  must,  in  the 
case  supposed,  have  assistance,  and  do  not  the  plainest  prin- 
ciples of  justice  require  that  the  primary  dut}'  of  yielding 
assistance  should  devolve  upon  the  employer  rather  than  on 

8 


114  AGENCY  BY  NECESSITY.  [CH.  V. 

strangers  ?  An  emploj'er  does  not  stand  to  his  servants  as  a 
stranger;  he  owes  them  a  duty.  The  cases  all  agree  that 
some  duty  is  owing  from  the  master  to  the  servant,  but  no 
case  that  we  have  been  able  to  find  defines  the  limits  of  this 
duty.  Granting  the  existence  of  this  general  dut}*,  and  no 
one  will  deny  that  such  a  duty  does  exist,  the  inquiry  is  as  to 
its  character  and  extent.  Suppose  the  axle  of  a  car  to  break 
because  of  a  defect,  and  a  brakeman's  leg  to  be  mangled  by 
the  derailment  consequent  upon  the  breaking  of  the  axle,  and 
that  he  is  in  immediate  danger  of  bleeding  to  death  unless 
surgical  aid  is  summoned  at  once,  and  suppose  the  accident 
to  occur  at  a  point  where  there  is  no  station  and  when  no 
officer  superior  to  the  conductor  is  present,  would  not  the 
conductor  have  authority  to  call  a  surgeon?  Is  there  not  a 
duty  to  the  mangled  man  that  some  one  must  discharge? 
and  if  there  be  such  a  dut}-,  who  owes  it,  the  emploj'er  or  a 
stranger?  Humanity  and  justice  unite  in  affirming  that  some 
one  owes  him  this  duty,  since  to  assert  the  contrary  is  to 
affirm  that  upon  no  one  rests  the  duty  of  calling  aid  that  may 
save  life.  If  we  concede  the  existence  of  this  general  duty, 
then  the  further  search  is  for  the  one  who  in  justice  owes  the 
dut}',  and  surety,  where  the  question  comes  between  the  em- 
ployer and  a  stranger,  the  just  rule  must  be  that  it  rests  upon 
the  former. 

(After  discussing  various  authorities,1  the  court  proceeds.) 
If  we  are  right  in  our  conclusion  that  an  emergency  may 
arise  which  will  constitute  a  conductor,  for  the  time  and 
the  emergency,  the  chief  officer  of  the  corporation  present, 
then  these  cases  are  strongly  in  support  of  our  position  that 
he  ma}',  in  cases  of  urgent  necessity,  bind  the  corporation  by 
contracting  with  a  surgeon.      For,  once  it  is  conceded  that 

1  Marquette,  frc.  R.  v.  Tajl,  28  Mich.  289 ;  Northern  Central  Ry.  v.  State, 
29  Md.  420 ;  Walker  v.  Great  Western  Ry.,  L.  R.  2  Exch.  228 ;  Swazey 
v.  Union  Mfg.  Co.,  42  Conn.  556 ;  Atlantic,  frc.  R.  v.  Reisner,  18  Kans. 
458;  Atchison,  frc.  R.  v.  Reecher,  24  Kans.  228;  Toledo,  frc.  Ry.  v 
Rodrigues,  47  111.  188 ;  Toledo,  frc.  Ry.  v.  Prince,  50  111.  26 ;  Indianapolis, 
frc.  R.  v.  Morris,  67  111.  295 ;  Cairo,  frc.  R.  v.  Mahoney,  82  HI.  73. 


§  59.]         TEHEE  HAUTE  &  I.  B.  CO.  V.  McMURRAY.        115 

the  officer  having  a  right  to  represent  the  company  is  the 
company,  it  inevitably  follows  that  his  contract  is  that  of  the 
corporation.  These  cases  do  deny,  however,  in  general 
terms,  the  authority  of  a  station  agent  or  conductor  to  em- 
ploy a  surgeon,  but  they  affirm  that  if  the  superintendent  has 
notice  of  the  services  rendered  by  the  surgeon,  and  does  not 
disavow  the  agent's  acts,  the  company  will  be  bound.  It  is  to 
be  noted  that  in  all  of  these  cases  the  company  was  held  liable 
on  the  ground  of  ratification  by  the  superintendent,  and  there 
was  really  no  decision  of  any  other  question  than  that  a  fail- 
ure of  the  superintendent  to  disavow  the  contract  of  the  con- 
ductor or  station  agent  rendered  the  company  liable.  There 
was  no  discussion  of  the  authority  of  a  conductor  in  cases  of 
immediate  and  urgent  necessity.  The  reasoning  of  the  court 
in  these  cases  strongly  indicates  that  the  act  of  the  superior 
officer,  whoever  he  ma}*  be,  on  the  occasion  and  under  the 
emergency,  would  be  deemed  the  act  of  the  corporation  which 
he  assumes  to  represent  In  the  last  of  these  cases  it  is  said  : 
"  While  a  railroad  companj*  is  under  no  legal  obligation  to 
furnish  an  employe,  who  may  receive  injuries  while  in  the 
service  of  the  company,  with  medical  attendance,  jet,  where 
a  day  laborer  has,  by  an  unforeseen  accident,  been  rendered 
helpless  when  laboring  to  advance  the  prosperity  and  the  suc- 
cess of  the  company,  honest}'  and  fair  dealing  would  seem  to 
demand  that  it  should  furnish  medical  assistance."  If  it 
be  conceded  that  honesty  and  fair  dealing  require  that  medi- 
cal assistance  should  be  furnished,  then  the  law  requires  it, 
for  the  law  always  demands  honesty  and  fair  dealing.  It 
would  be  a  cruel  reproach  to  the  law,  and  one  not  merited, 
to  declare  that  it  denied  to  an  injured  man  what  honesty 
and  "fair  dealing  require." 

If  it  should  appear  that  a  man  had  been  denied  what 
honesty  and  fair  dealing  require  of  his  master,  and  death 
should  result,  it  would  seem  clear,  on  every  principle  of 
justice,  that  the  master  would  be  responsible  for  the  servant's 
death.  Of  course  this  dut}'  should  not  rest  upon  the  master 
in  ordinary  cases,  but  should  rest  upon  him  in  extraordinary 


116  AGENCY  BY  NECESSITY.  [CH.  V. 

cases,  where  immediate  medical  assistance  is  imperatively 
demanded.  The  case  of  Tucker  v.  St.  Louis,  <$x.,  R.  W. 
Co^  54  Mo.  177,  does  decide  that  a  station  agent  has  no 
authority  to  employ  a  surgeon,  but  no  element  of  pressing 
necessity  entered  into  the  case.  There  is  no  authority  cited 
in  support  of  the  opinion,  nor  is  there  any  reasoning.  All 
that  is  said  is  :  "  It  is  only  shown  that  they  "  (the  station 
agent  and  the  conductor)  "  were  agents  of  defendant  in 
conducting  its  railroad  business,  which  of  itself  could 
certainly  give  them  no  authority  to  employ  physicians, 
for  the  defendant,  to  attend  to,  and  treat,  persons  acci- 
dentally injured  on  the  roads."  It  may  be  that  this  state- 
ment is  true  in  ordinary  cases,  but  when  we  add  the  element 
of  immediate  and  pressing  necessity,  a  new  and  potent  factor 
is  introduced  into  the  case.  A  brief  opinion  was  rendered  in 
Brown  v.  Missouri,  <&c,  R.  W.  Co.,  67  Mo.  122,  declaring 
that  the  superintendent  of  the  company  could  not  bind  the 
company  for  "  a  small  bill  of  drugs  furnished  a  woman  who 
had  been  hurt  by  the  locomotive  or  cars  of  the  defendant." 
It  may  be  said  of  the  last  cited  case  that  it  presented  no 
feature  of  emergenc}-  requiring  prompt  action,  and  for  aught 
that  appears  in  the  meagre  opinion  of  a  very  few  lines,  there 
may  have  been  no  necessit}'  for  action.  But  it  is  further  to 
be  said  of  it,  that  if  it  is  to  be  deemed  as  going  to  the  extent 
of  denying  the  right  of  one  of  the  principal  officers  to  con- 
tract for  medicine  in  a  case  of  urgenc}',  it  finds  no  support 
from  any  adjudged  case.  The  case  of  Mayberry  v.  Chicago, 
&c,  R.  R.  Co.,  75  Mo.  492,  is  not  in  point,  for  there  a 
physician  employed  to  render  medical  aid,  and  employed 
for  no  other  purpose,  undertook  to  contract  for  boarding  for 
an  injured  man. 

The  learned  counsel  for  appellant  says,  in  his  argument : 
M  In  several  of  these  cases  the  court  takes  occasion  to  say 
that  humanity,  if  not  strict  justice,  requires  a  railroad  com- 
pany to  care  for  an  employe  who  is  injured  without  fault  on 
his  part  in  endeavoring  to  promote  the  interests  of  the  com- 
pany.    Whilst  this  may  be  true,  I  think  that  humanity  and 


§  59.]         TERRE  HAUTE  &  I.  E.  CO.  V.  McMURRAY.        117 

strict  justice,  too,  would  at  least  permit  the  company  to 
adopt  the  proper  means  for  exercising  the  required  care,  and 
of  determining  the  cases  wherein  it  ought  to  be  exercised." 

It  seems  to  us  that  while  the  concession  of  the  counsel  is 
required  by  principle  and  authority,  his  answer  is  far  from 
satisfactory.  Can  a  man  be  permitted  to  die  while  waiting 
for  the  company  to  determine  when  and  how  it  shall  do  what 
humauity  and  strict  justice  require?  Must  there  not  be 
some  representative  of  the  company  present,  in  cases  of  dire 
necessity,  to  act  for  it?  The  position  of  counsel  will  meet 
ordinary  cases,  but  it  falls  far  short  of  meeting  cases  where 
there  is  no  time  for  deliberation,  and  where  humanity  and 
justice  demand  instant  action.  From  whatever  point  of 
view  we  look  at  the  subject,  we  shall  find  that  the  highest 
principles  of  justice  demand  that  a  subordinate  agent  may, 
in  the  company's  behalf,  call  surgical  aid,  when  the  emergen- 
cies of  the  occasion  demand  it,  and  when  he  is  the  sole  agent 
of  the  compan}'  in  whose  power  it  is  to  summon  assistance  to 
the  injured  and  suffering  servant.  Humanity  and  justice  are, 
for  the  most  part,  inseparable,  for  all  law  is  for  the  ultimate 
benefit  of  man.  The  highest  purpose  the  law  can  accom- 
plish is  the  good  of  society  and  its  members ;  and  it  is 
seldom,  indeed,  that  the  law  refuses  what  humanity  sug- 
gests. Before  this  broad  principle  bare  pecuniary  con- 
siderations become  as  things  of  little  weight.  There  may 
be  cases  in  which  a  denial  of  the  right  of  the  conductor  to 
summon  medical  assistance  to  one  of  his  train  men  would 
result  in  suffering  and  death ;  while,  on  the  other  hand,  the 
assertion  of  the  right  can,  at  most,  never  do  more  than  entail 
upon  the  corporation  pecuniary  loss.  It  may  not  do  even 
that,  for  prompt  medical  assistance  may,  in  many  cases, 
lessen  the  loss  to  the  company  b}'  preventing  loss  of  life 
or  limb. 

The  authority  of  a  conductor  of  a  train  in  its  general 
scope  is  known  to  all  intelligent  men,  and  the  court  that 
professes  itself  ignorant  of  this  matter  of  general  notoriety 
avows  a  lack  of  knowledge  that  no  citizen  who  has  the 


118  AGENCY  BY  NECESSITY.  [CH.  V. 

slightest  acquaintance  with  railroad  affairs  would  be  willing 
to  confess.  It  is  true  that  the  exact  limits  of  his  authority 
cannot  be  inferred  from  evidence  that  he  is  the  conductor 
in  charge  of  the  train,  but  the  general  duty  and  authority 
may  be.  This  general  authority  gives  him  control  of  the 
train  men  and  of  the  train,  and  devolves  upon  him  the  duty 
of  using  reasonable  care  and  diligence  for  the  safety  of  his 
subordinates.  The  authority  of  the  conductor  maj-  be  in- 
ferred, as  held  in  Columbus,  &c,  H.  W.  Co.  v.  Powell,  40 
Ind.  37,  from  his  acting  as  such  in  the  control  of  the  train, 
but  this  inference  only  embraces  the  ordinary  duties  of  such 
an  agent.  Man}'  cases  declare  that  the  conductor,  in  the  man- 
agement of  the  train  and  matters  connected  with  it,  represents 
the  compan}'.  It  is  true  that  the  agency  is  a  subordinate  one, 
confined  to  the  subject-matter  of  the  safety  of  the  train  and 
its  crew,  and  the  due  management  of  matters  connected  with 
it ;  but  although  the  conductor  is  a  subordinate  agent,  he  yet 
has  broad  authority  over  the  special  subject  committed  to  his 
charge.  It  was  said  in  JeffersonviUe  Ass'n  v.  Fisher,  7  Ind. 
699,  that  "  It  is  not  the  name  given  to  the  agent,  but  the  acts 
which  he  is  authorized  to  do,  which  must  determine  whether 
they  are  valid  or  not,  when  done."  In  another  case  it  was 
said  :  "The  authority  of  an  agent  being  limited  to  a  particu- 
lar business  does  not  make  it  special ;  it  may  be  as  general 
in  regard  to  that,  as  though  its  range  were  unlimited." 
Cruzan  v.  Smith,  41  Ind.  288.  This  subject  was  discussed 
in  Toledo,  dc,  B.  W.  Co.  v.  Owen,  43  Ind.  405,  where  it 
was  said :  "A  general  agent  is  one  authorized  to  transact 
all  his  principal's  business,  or  all  of  his  principal's  business 
of  some  particular  kind.  A  special  agent  is  one  who  is 
authorized  to  do  one  or  more  special  things,  and  is  usually 
confined  to  one  or  more  particular  transactions,  such  as  the 
sale  of  a  tract  of  land,  to  settle  and  adjust  a  certain  account, 
or  the  like.  That  the  authority  of  an  agent  is  limited  to  a 
particular  kind  of  business  does  not  make  him  a  special 
agent.  Few,  if  any,  agents  of  a  railroad  company  do,  or  can 
attend  to,  every  kind  of  business  of  the  company,  but  to  each 


§  59.]         TERRE  HAUTE  &  I.  R.  CO.  V.  McMURRAY.        119 

one  is  assigned  duties  of  a  particular  kind,  or  relating  to  a 
particular  branch  or  department  of  the  business."  Wharton 
sa\s:  "A  general  agent  is  one  who  is  authorized  03-  his 
principal  to  take  charge  of  his  business  in  a  particular  line." 
Wharton  on  Agencj',  117.  It  results  from  these  familiar 
principles,  that  the  conductor  of  a  train,  so  far  as  concerns 
the  direct  and  immediate  management  of  the  train  when  it  is 
out  on  the  road,  is,  in  the  absence  of  some  superior  officer, 
the  general  agent  of  the  company ;  but  even  general  agents 
do  not  have  universal  powers,  and  the  authority  of  such 
agents  is  to  be  deduced  from  the  facts  surrounding  the 
particular  transaction.  2  Greenl.  Ev.  sees.  64-64a.  In 
some  instances,  then,  the  conductor  is  the  general  agent  of 
the  company ;  and  we  think  it  clear,  upon  principle  and 
authority,  that  he  is  such  an  agent  for  the  purpose  of 
employing  surgical  assistance  where  the  brakeman  of  his 
train  is  injured  while  the  train  is  out  on  the  road,  and  where 
there  is  no  superior  officer  present,  and  there  is  an  immediate 
necessity  for  surgical  treatment.  A  conductor  cannot  be 
regarded  as  having  authority  to  emplo}'  a  surgeon  when  the 
train  is  not  on  the  road  under  his  control;  or  where  there  is 
one  higher  in  authority  on  the  ground,  or  where  there  is  no 
immediate  necessity  for  the  services  of  a  surgeon. 

Judgment  affirmed. 

Zollars,  C.  J.,  dissents  on  the  ground  that  it  is  not 
sufficiently  shown  that  the  conductor  had  authority  to  bind 
the  company  bj*  his  contract  with  appellee. 

ON   PETITION   FOR   A   REHEARING. 

Elliott,  J.  Counsel  for  the  appellant  misconceive  the 
drift  of  the  reasoning  in  our  former  opinion,  as  well  as  the 
conclusion  announced.  We  did  not  decide  that  a  corporation 
was  responsible  generally  for  medical  or  surgical  attention 
given  to  a  sick  or  wounded  servant;  on  the  contrary,  we 
were  careful  to  limit  our  decision  to  surgical  services  ren- 


120  AGENCY  BY  NECESSITY.  [CH.  V. 

dered  upon  an  urgent  exigency,  where  immediate  attention 
was  demanded  to  save  life  or  prevent  great  injury.  We 
held  that  the  liability  arose  with  the  emergency,  and  with  it 
expired. 

We  did  hold  that  where  the  conductor  was  the  highest 
representative  of  the  corporation  on  the  ground,  and  there 
was  an  emergency  requiring  immediate  action,  he  was 
authorized  to  emplo}'  a  surgeon  to  give  such  attention  as  the 
exigency  of  the  occasion  made  imperiously  necessary ;  but 
we  did  not  hold  that  the  conductor  had  a  general  authority 
to  employ  a  surgeon  where  there  was  no  emergenc}*,  or  where 
there  was  a  superior  agent  on  the  ground.  We  think  our 
decision  was  well  sustained  b}r  the  authorities  there  cited, 
and  that  it  is  further  supported  by  the  reasoning  in  Chicago, 
dc,  R.  W.  Co.  v.  Boss,  31  Albany  L.  J.  8,  112  U.  S.  377, 
and  Pennsylvania  Company  v.  Gallagher,  40  Ohio  St.  637 ; 
S.  C.  48  Am.  R.  689. 

If  the  conductor,  who  is  the  superior  agent  of  the  company 
on  the  ground,  cannot  represent  the  principal  so  far  as  to 
employ  a  surgeon  to  render  professional  services  to  an  injured 
servant,  and  prevent  the  loss  of  life  or  great  bodily  harm,  then 
it  must  be  said,  as  it  was  said  by  the  Supreme  Court  of  the 
United  States  in  Chicago,  &c,  H.  W.  Co.  v.  Hoss,  supra, 
that  M  If  such  conductor  does  not  represent  the  company, 
then  the  train  is  operated  without  any  representative  of  its 
owner." 

The  decision  in  Louisville,  &c,  B.  RA  Co.  v.  McVay, 
98  Ind.  391,  is  not  in  conflict  with  our  conclusion  in  the 
present  case.  There  the  road-master  was  not  the  superior 
agent  within  reach,  and  there  was  no  emergency  demanding 
immediate  action.  These  are  features  which  very  essentially 
distinguish  the  two  cases.  We  held  in  this  case  a  doctrine 
held  in  the  case  cited,  namely,  that  the  conductor,  or  other 
subordinate  agent,  has  no  general  authority  to  employ  a 
surgeon  for  a  sick  or  wounded  servant  of  the  company  ;  but 
we  also  held  that  where  the  conductor,  in  control  of  the 
company's  train  and  its  brakeman,  is  the  highest  agent  on 


§  59.]  GWILLIAM  V.  TWIST.  121 

the  ground,  he  does  possess  an  authority  commensurate 
with  an  existing  and  pressing  emergency.  It  seems  clear 
to  us,  upon  principles  of  fair  justice  and  ordinary  humanity, 
that  some  one  must  possess  authority  to  meet  an  urgent 
exigency  by  employing  surgical  aid  to  save  from  death  or 
great  and  permanent  injury  a  servant  under  his  control. 
As  the  reasoning  in  the  McVay  case  clearly  shows,  there  is 
still  another  material  difference  between  the  two  cases,  and 
that  is  this :  There  the  road-master  appeared  to  only  have 
authority  over  the  repairs  of  the  road  ;  while  here  it  appears 
that  the  conductor  had  charge  of  the  injured  servant,  and 
was  the  highest  officer  of  the  corporation  capable  of  acting 
as  its  representative  in  the  emergency  which  had  so  suddenly 
arisen. 

So  far  as  concerns  the  general  principle  involved,  there  is 
no  conflict,  but  rather  harmony,  for  the  McVay  case  clearly 
recognizes  the  doctrine  that  the  highest  agent  capable  of 
acting  for  the  company  may  employ  surgical  aid  in  the 
proper  case.  Petition  overruled. 


§  59.]  GWILLIAM  v.   TWIST  et  al. 

1895.     1  Queen's  Bench  Division,  557. 

64  Law  Journal  Reports,  Queen's  Bench  Division  (C.  A.), 
474  (1895). 

Action  for  damages  for  injuries  received  through  the 
careless  management  of  defendants'  omnibus.  Judgment  for 
plaintiff.     Defendants  appeal. 

Defendants'  servant  Harrison,  to  whom  had  been  intrusted 
the  driving  of  the  omnibus,  was  stopped  by  a  police  officer 
for  intoxication,  and  forbidden  to  drive  the  omnibus  further. 
One  Veares  volunteered  to  drive  the  omnibus  to  defendants' 
yard,  which  was  distant  about  a  quarter  of  a  mile.  Harrison 
and  the  conductor  acquiesced,  and  both  remained  in  the 
omnibus,  Harrison  shouting  directions  to  Veares  to  drive 


122  AGENCY  BY  NECESSITY.  [CH.  V. 

carefully  at  the  corners.  Veares  drove  negligently  and  in- 
jui'ed  plaintiff.  The  county  court  judge  (Judge  Chalmers) 
found  for  the  plaintiff.  An  appeal  was  taken  to  the  Queen's 
Bench  Division. 

[1895,  1  Q.  B.  D.  557.] 

Lawrance,  J.  The  question  is  whether  Harrison  and  the 
conductor,  by  acquiescing  in  Veares  driving  the  omnibus, 
constituted  Veares  the  servant  of  the  defendants,  so  as  to 
render  the  defendants  liable  for  the  accident  which  happened 
while  he  was  so  driving.  The  judge  held  that,  if  they  had 
the  power  to  do  so,  they  must  be  taken  to  have  authorized 
Veares  to  drive  on  the  defendants'  behalf.  Then,  had  they 
the  power  to  do  so  ?  In  the  absence  of  an  express  authority 
in  that  behalf,  is  an  authority  to  employ  Veares  to  be  im- 
plied ?  I  think  that,  having  regard  to  the  necessity  which 
the  judge  apparently  found  as  a  fact  to  have  arisen,  such  an 
authority  must  be  implied.  The  judgment  must  therefore  be 
affirmed. 

Wright,  J.  This  case  raises  a  ver}T  serious  question  of 
law,  upon  which,  so  far  as  I  am  aware,  there  is  little  or  no 
authorit}T.  The  view,  however,  which  I  take  upon  the  matter 
is  this.  I  think  that  in  cases  of  sudden  emergency  a  servant 
has  an  implied  authority  from  his  employer  to  act  in  good 
faith  according  to  the  best  of  his  judgment  for  that  em- 
ployer's interests,  subject  to  this,  that  in  so  doing  he  must 
violate  no  express  limitation  of  his  authority,  and  must  not 
act  in  a  manner  which  is  plainly  nnraftsoimblp.  And  in  cases 
to  which  this  doctrine  applies  I  think  the  servant  must  be 
regarded  as  not  the  less  acting  within  the  scope  of  his 
employment  because  his  judgment  happens  to  be  mistaken 
and  wrong.  Of  course  a  servant  cannot  have  an}T  implied 
authority  to  do  on  behalf  of  his  master  any  act  which  it 
would  be  illegal  for  the  master  to  do  himself ;  for  instance, 
if  there  had  been  a  statute  or  by-law  applying  to  those  omni- 
buses, making  it  illegal  to  employ  an  unlicensed  person  to 
drive  them,  I  think  the  defendants'  servants  would  not,  how- 


§  59.]  GWILLIAM  V.  TWIST.  123 

ever  great  the  emergency  was,  have  been  acting  within  the 
scope  of  their  employment  in  authorizing  such  a  person  as 
Veares  to  drive  on  their  employers'  behalf.  But  no  such 
illegality  was  shown  here.  Such,  then,  being  my  view  of  the 
legal  doctrine  applicable  to  the  facts  of  this  case,  I  cannot 
sa}'  that  there  was  not  some  evidence  on  which  the  county 
court  judge  might  find  that  such  an  emergency  existed  as 
would  bring  the  case  within  the  limits  of  that  doctrine. 
Whether  upon  the  question  of  fact  I  should  have  arrived  at 
the  same  conclusion  is  another  matter ;  but  I  am  of  opinion 
that  we  cannot  upon  the  question  of  law  say  that  the  judg- 
ment was  wrong.  Appeal  dismissed. 

The  defendants  then  appealed  to  the  Court  of  Appeal. 

[64  L.  J.  Q.  B.  474.] 

Lord  Esher,  M.  R.  Thl*g  fia,EA  miapg  q  qHPgUrm  0f  great 
importance,  which f  however,  it  does  not  seem  to  me,  we  have 
now  to  decide.  That  question  is  whether,  where  it  may  become 
necessary  for  a  servant  who  is  intnisted  with  a  particular 
duty  to  delegate  that  duty  to  some  onft  pIsp,  that.  rogation 
makes  that  person  to  whom  the  duty  has  been  so  delegated 
the  servant  of  the  master  so  as  to  render  the  master  liable 
for  his  wrongful  acts.  This  proposition,  however,  is  clear,  — 
namely,  that  a  servant  employed  for  a  particular  purpose  can 
have  no  authority  to  delegate  that  duty  to  any  one  else, 
unless  there  is  a  necessit}*  that  he  should  do  so.  The  ser- 
vant cannot  delegate  unless  there  is  a  necessity  to  do  so.  The 
question  here  is  whether  there  was  an}'  evidence  upon  which 
the  count}'  court  judge  could  reasonabty  find  that  there  was 
a  necessity  for  the  driver  of  the  defendants'  omnibus  to 
delegate  his  dutj-  to  Veares.  First  of  all,  I  do  not  think  that 
the  county  court  judge  did  find,  as  a  fact,  that  there  was 
an}T  such  necessity ;  but  afterwards,  when  he  delivered  judg- 
ment, he  did  seem  to  assume  that,  upon  the  facts  of  the  case, 
such  a  necessity  did  arise.  The  question,  therefore,  is  whether 
the  servant  had  any  right  to  delegate  his  duty  without  first 


124  AGENCY  BY   NECESSITY.  [CH.  V. 

consulting  his  master,  for,  if  he  had  an  opportunity  to  do  so, 
no  question  of  necessity  could  arise.  Here  the  driver  became 
incapable  of  driving  the  omnibus  ;  such  incapacity  being  the 
result  of  an  order  given  by  the  police  forbidding  him  to  drive 
it.  It  is  obvious  that  the  omnibus,  which  was  only  about 
a  quarter  of  a  mile  from  the  defendants'  yard,  might  have 
been  left  standing  in  reasonable  safety  where  it  was,  and  the 
horses  might  have  been  watched,  while  the  defendants'  ser- 
vants communicated  with  their  masters  for  directions  as  to 
what  was  to  be  done.  The  moment  that  was  clear,  the 
county  court  judge  would  have  been  bound  to  tell  the  jury 
that  no  case  of  necessity  had  been  made  out  for  the  driver 
delegating  his  duty  without  first  communicating  with  his 
masters.  There  was  no  evident  upon  which  he  could  rea- 
sonably say  that  there  was  any  necessity  on  the  part  of  the 
driver  to  delegate  hia  duty  to  Veares  so  as  to  make  the 
defendants  liable  by  reason  of  Veares  being  their  servant  for 
this  purpose.  I  agree  with  the  remarks  of  Mr.  Baron  Parke 
in  Hawtayne  v.  Bourne,  7  M.  &  W.  595,  and  of  Chief 
Justice  Eyre  in  Nicholson  v.  Chapman,  2  H.  Black.  254, 
that  the  delegation  of  duty  by  reason  of  necessity  is  confined 
to  certain  well-known  cases  —  as,  for  instance,  in  the  cases 
of  the  master  of  a  ship,  or  of  an  acceptor  of  a  bill  of  exchange 
for  the  honor  of  the  drawer,  or  of  salvage ;  but  those  are 
cases  which  are  excepted,  some  by  the  law  of  nations,  and 
some  by  the  law  of  this  country.  The  appeal  must  therefore 
be  allowed. 

Smith,  L.  J.  I  am  of  the  same  opinion.  ...  It  is, 
however,  said  that  such  circumstances  may  arise  that  the 
coachman  is  constituted  an  agent  of  his  master  by  necessit}-. 
That  m^y  be  so,  but  the  agent  must  be  placed  in  such  a 
position  that  he  has  to  act  upon  his  own  responsibility  and 
common  sense  when  he  is  not  able  to  communicate  with  his 
principal.  A  resume  of  the  cases  which  show  what  consti- 
tutes an  agent  of  necessity  in  the  case  of  goods  carried  on 
board  ship,  will  be  found  in  Carver's  Carriage  by  Sea,  where 
it  is  said,  in  section  299,  that,  "  If  there  is  a  fair  expectation  of 


§  59.]  GWILLIAM  V.   TWIST.  125 

obtaining  directions,  either  from  the  owners  of  the  goods  or 
from  agents  known  by  the  master  to  have  authority  to  deal 
with  the  goods,  within  such  a  time  as  would  not  be  imprudent, 
the  master  must  make  ever}-  reasonable  endeavor  to  get 
those  directions  ;  and  his  authority  to  sell  does  not  arise  until 
he  has  failed  to  get  them,"  —  that  is  to  say,  that  until  he  has 
made  that  endeavor  and  failed,  he  does  not  become  an  agent 
of  necessity.  I  adopt  the  words  of  the  passage  which  I  have 
read.  It  is  true  that  when  the  county  court  judge  gave  his 
findings  here  on  the  questions  of  fact  in  the  first  instance,  he 
did  not  deal  with  the  question  whether  a  case  of  necessity 
arose  ;  but  when  he  delivered  judgment,  after  further  consider- 
ation, he  said  that  it  was  clearly  necessarj*  that  some  one 
should  drive  the  omnibus  home.  It  appears  to  me,  however, 
that  that  did  not  make  Harrison  an  agent  of  necessit}*  within 
the  law  applicable  to  such  a  question.  It  is  impossible,  upon 
the  admitted  facts  of  the  case,  to  say  that  there  was  evidence 
that  Harrison  was,  under  the  circumstances  of  the  case,  an 
agent  of  necessity.  The  omnibus  was  within  a  quarter  of  a 
mile  of  his  masters'  yard,  and  it  is  obvious  that  he  had  an 
opportunity  of  communicating  with  them.  Upon  these  grounds, 
I  think  that  Harrison  was  not  acting  within  the  scope  of  his 
authority  when  he  permitted  Veares  to  drive  the  omnibus  home, 
and  consequently  the  defendants  are  not  liable  for  the  injuries 
caused  by  Veares'  negligence. 

Rigbt,  L.  J.  I  am  of  the  same  opinion.  The  county 
court  judge  here  found  certain  facts,  and  reserved  the  ques- 
tion of  law.  I  should  be  inclined  to  say  that  in  his  judgment 
he  assumes  there  was  a  necessity  from  the  facts  found.  I 
think  there  was  no  evidence  here  of  such  a  necessity  as  is 
required  by  law  to  justify  Harrison  in  placing  Veares  in  the 
position  of  driver,  and  by  so  doing  make  the  defendants 
liable  for  his  negligence.  I  do  not  think  any  of  the  cases 
even  point  to  such  a  liability  unless  there  be  such  a  necessity  ; 
and,  for  the  reasons  that  have  been  given,  I  do  not  think 
there  is  any  evidence  of  such  necessity  in  this  case. 

Appeal  allowed. 


CHAPTER  VI. 

TERMINATION  OF  THE  AGENCY. 
1.  By  accomplishment  of  purpose. 

§  61.]      ROWE,  Trustee   v.   RAND,   Receiver. 
Ill  Indiana,  206.  — 1887. 

Intervening  petition  by  Rowe,  designating  himself  "  trus- 
tee," against  Rand,  as  receiver  of  the  Indiana  Banking  Co., 
praying  that  an  allowance  be  made  in  his  favor  for  funds 
deposited  in  the  bank  by  him  as  "trustee."  Defence: 
(1)  denial;  (2)  payment;  (3)  release.  Judgment  for  de- 
fendant.    Petitioner  appeals. 

Rowe  was  intrusted  with  certain  property  belonging  jointly 
to  the  First  N.  B.  (No.  55)  and  the  Indiana  Banking  Co., 
with  instructions  to  sell  it  and  divide  the  proceeds  between 
the  two  companies  in  a  given  proportion.  Rowe  sold  the 
property  and,  with  the  consent  of  both  companies,  deposited 
the  proceeds  to  his  own  credit,  under  the  name  of  k'  William 
Rowe,  trustee,"  in  the  bank  of  the  Indiana  Banking  Co.  He 
used  this  designation  because  he  already  had  accounts  there 
in  his  individual  name,  in  his  name  as  "  agent,"  and  in  his 
name  as  "  receiver."  Later  the  First  N.  B.  (No.  55)  was 
replaced  by  a  new  organization  known  as  the  First  N.  B. 
(No.  2556)  which  succeeded  to  the  assets  and  business  of  the 
former  bank.  Later  still  the  Indiana  Banking  Co.  became 
insolvent,  and  defendant  Rand  was  appointed  receiver.  The 
insolvent  compan}-  owed  the  two  national  bank  organizations 
a  large  sum  of  monej*,  and  there  was  an  additional  claim 
which  was  contested.  The  representatives  of  the  three 
organizations  met,  before  the  appointment  of  the  receiver, 
adjusted  their  claims  and  signed  mutual  releases. 


§  61.]  EOWE  V.   RAND.  127 

Notwithstanding  this  settlement  Rowe  claimed  the  right  to 
recover  the  amount  deposited  03-  him  in  his  name  as  trustee. 

Niblack,  J.  A  trustee  is  one  to  whom  an  estate  has  been 
conveyed  in  trust,  and,  consequently,  the  holding  of  property 
in  trust  constitutes  a  person  a  trustee.  An  agent  is  one  who 
acts  for,  or  in  place  of,  another,  denominated  the  principal, 
in  virtue  of  power  or  authority  conferred  bjT  the  latter,  to 
whom  an  account  must  be  rendered.  In  the  case  of  an 
ordinary  agenc}'  for  the  sale  or  disposition  of  property,  the 
title  to  the  propert}*,  as  well  as  to  the  proceeds,  remains  in  the 
principal.  Such  an  agency  may  be  revoked  at  any  time,  in 
the  discretion  of  the  principal.  It  may,  also,  be  in  like  man- 
ner terminated  by  the  renunciation  of  the  agent,  he  being 
liable  only  for  the  damages  which  may  result  to  the  principal. 
An  agency  may  also  be,  and  is,  revoked  by  operation  of  law 
in  certain  cases,  among  which  are  the  bankruptcy  of  the 
principal,  the  extinction  of  the  subject-matter  of  the  agency, 
the  loss  of  the  principal's  power  over  such  subject-matter,  or 
the  complete  execution  of  the  business  for  which  the  agency 
was  created ;  also,  where  the  changed  condition  becomes 
such  as  to  produce  an  incapacity  in  either  party  to  proceed 
with  the  business  of  the  agency.  Where  a  power  or  authority 
to  act  as  agents  is  conferred  on  two  persons,  the  death  of  one 
of  them  terminates  the  agency.  So,  where  two  persons  are 
jointly  appointed  agents  to  take  charge  of  a  particular  busi- 
ness for  a  specified  term  or  purpose,  and  one  of  them  becomes 
incapacitated  before  the  term  is  completed  or  the  purpose  is 
accomplished,  the  other  cannot  proceed  alone  without  the 
consent  of  the  principal,  and  hence  the  agency  is  thereby  in 
effect  revoked.  Abbott's  and  Bouvier's  Law  Dictionaries, 
titles  "Agent,"  and  "Agency;"  1  Wait,  Actions  and  De- 
fences, 289  ;  1  Parsons  on  Cont.  39,  et  seq.;  Story  on  Agency, 
sees.  38,  42,  474,  499. 

The  inevitable  inference  from  these  legal  propositions  is, 
that  when  two  principals  jointly  appoint  an  agent  to  take 
charge  of  some  matter  in  which  they  are  jointly  interested, 
and  a  severance  of  their  joint  interest  afterwards  occurs,  the 
severance  revokes  the  agency. 


128  TERMINATION   OF  AGENCY.  [CH.  VI. 

An  agent  ma}'  sue  in  his  own  name :  First.  When  the 
contract  is  in  writing,  and  is  expressly  made  with  him, 
although  he  may  bave  been  known  to  act  as  agent.  Sec- 
ondly. When  the  agent  is  the  only  known  or  ostensible 
principal,  and  is,  therefore,  in  contemplation  of  law,  the  real 
contracting  part}'.  Thirdly.  When  by  the  usage  of  trade,  he 
is  authorized  to  act  as  owner,  or  as  a  principal  contracting 
party,  notwithstanding  his  well  known  position  as  agent  only. 
But  this  right  of  an  agent  to  bring  an  action,  in  certain  cases, 
in  his  own  name  is  subordinate  to  the  rights  of  the  principal, 
who  may,  unless  in  particular  cases,  where  the  agent  has  a 
lien  or  some  other  vested  right,  bring  suit  himself,  and  thus 
suspend  or  extinguish  the  right  of  the  agent. 

Applying  the  general  principles  thus  announced  to  the 
facts  herein  above  stated,  our  conclusions  are,  that  Howe 
became  an  agent  only,  and  hence  not  a  trustee,  for  the  sale 
of  the  property  left  with  him  by  the  banks  ;  that  he  acquired 
no  lien  either  upon  the  property  or  its  proceeds  which  would 
have  prevented  the  national  banks,  or  either  one  of  them,  as 
the  situation  might  have  authorized  at  the  time,  from  revok- 
ing Rowe's  authority  as  their  agent,  and  demanding  an 
accounting  from  the  banking  company  as  to  the  money 
deposited  with  it  by  him,  or  from  demanding  such  an  account- 
ing without  revoking  Rowe's  agency ;  that,  consequently, 
the  money  so  deposited  constituted  a  fund  upon  which  the 
national  banks  might  have  based  a  claim  against  the  banking 
company  when  the  agreement  was  mutually  entered  into  on 
the  tenth  da}'  of  August,  1883,  and  that,  if,  in  fact,  all  claim 
against  that  fund  was  released  by  the  agreement  of  that  date, 
the  agency  of  Rowe  in  all  matters  concerning  the  fund  was 
thereby  revoked,  leaving  him  in  a  position  to  demand  only  an 
accounting  for  his  services  and  expenses. 

(The  court  further  holds  that  the  mutual  releases  must  be 
construed  to  include  all  claims  of  every  kind  held  by  the 
national  banks  against  the  banking  company.) 

Judgment  affirmed. 


§  61.]  AHERN  V.   BAKER.  129 


§61.]  AHERN  v.  BAKER. 

34  Minnesota,  98.  —  1885. 

Action  for  damages  for  refusal  to  perform  a  contract  to 
sell  land.  Answer,  revocation  of  authority  of  agent  who 
concluded  the  sale.     Demurrer  to  answer  overruled. 

Vanderburgh,  J.  The  defendant,  on  the  ninth  day  of 
September,  1884,  specially  authorized  one  Wheeler,  as  his 
agent,  to  sell  the  real  property  in  controversy,  and  to  execute 
a  contract  for  the  sale  of  the  same.  He  in  like  manner  on 
the  same  day  empowered  one  Fairchild  to  sell  the  same  land, 
the  authority  of  the  agent  in  each  instance  being  limited  to 
the  particular  transaction  named.  On  the  same  day,  Wheeler 
effected  a  sale  of  the  land,  which  was  consummated  by  a 
conveyance.  Subsequently,  on  the  tenth  day  of  September, 
Fairchild,  as  agent  for  defendant,  and  having  no  notice  of 
the  previous  sale  made  by  Wheeler,  also  contracted  to  sell 
the  same  land  to  this  plaintiff,  who,  upon  defendant's  refusal 
to  perform  on  his  part,  brings  this  action  for  damages  for 
breach  of  the  contract. 

This  is  a  case  of  special  agenc}r,  and  there  is  nothing  in  the 
case  going  to  show  that  the  plaintiff  would  be  estopped  from 
setting  up  a  revocation  of  the  agencj'  prior  to  the  sale  by 
Fairchild.  A  revocation  may  be  shown  by  the  death  of  the 
principal,  the  destruction  of  the  subject-matter,  or  the  deter- 
mination of  his  estate  by  a  sale,  as  well  as  by  express  notice. 
The  plaintiff  had  a  right  to  empky  several  agents,  and  the 
act  of  one  in  making  a  sale  would  preclude  the  others  with- 
out any  notice,  unless  the  nature  of  his  contract  with  them 
required  it.  In  dealing  with  the  agent  the  plaintiff  took 
the  risk  of  the  revocation  of  his  agency.  1  Parsons  on 
Cont.  71. 

Order  affirmed,  and  case  remanded. 


130  TERMINATION   OF  AGENCY.  [CH.  VI. 

§  61.]  SHORT  v.   MILLARD. 

68  Illinois,  292. —  1873. 
[Reported  herein  at  p.  166.] 

2.  By  revocation. 

§  65.]  BROOKS  HIRE  v.  BROOKSHIRE. 

8  Iredell's  Law  (N.  C),  74.  — 1847. 

Assumpsit  to  recover  expenses  and  commissions  as  agent. 
Judgment  for  plaintiff  for  expenses  only.  Both  parties 
appeal. 

Plaintiffs  authority  was  by  deed.  Defendant  revoked  the 
authority  by  parol.  The  expenses  were  incurred  in  part  after 
such  parol  revocation.  The  court  charged  that,  if  there  was 
a  parol  revocation,  plaintiff  could  recover  for  expenses  and 
services  up  to  the  time  of  the  revocation,  but  not  after.  The 
verdict  was  for  expenses  up  to  the  time  of  the  revocation. 

Nash,  J.  It  is  not  denied  by  the  plaintiff,  that,  in  this 
case,  it  was  within  the  power  of  the  defendant  to  put  an  end 
to  his  agency,  by  revoking  his  authoritj\  Indeed,  this  is  a 
doctrine,  so  consonant  with  justice  and  common  sense,  that 
it  requires  no  reasoning  to  prove  it.  But  he  contends,  that 
it  is  a  maxim  of  the  common  law,  that  every  instrument  must 
be  revoked  by  one  of  equal  dignit}*.  It  is  true  an  instru- 
ment under  seal  cannot  be  released  or  discharged  b}-  an 
instrument  not  under  seal  or  by  parol ;  but  we  do  not  consider 
the  rule  as  applicable  to  the  revocation  of  powers  of  attor- 
ney, especially  to  such  an  one  as  we  are  now  considering. 
The  authority  of  an  agent  is  conferred  at  the  mere  will  of 
his  principal,  and  is  to  be  executed  for  his  benefit ;  the  prin- 
cipal, therefore,  has  the  right  to  put  an  end  to  the  agency 
whenever  he  pleases,  and  the  agent  has  no  right  to  insist 
upon  acting,  when  the  confidence  at  first  reposed  in  him  is 
withdrawn.    In  this  case,  it  was  not  necessary  to  enable  the 


§  65.]       BEOOKSHIRE  V.   BROOKSHIRE.         131 

plaintiff  to  execute  his  agency,  that  his  power  should  be 
under  seal ;  one  by  parol,  or  by  writing  of  any  kind,  would 
have  been  sufficient ;  it  certainly  cannot  require  more  form  to 
revoke  the  power  than  to  create  it.  Mr.  Story,  in  his  treatise 
on  Agency,  page  606,  lays  it  down  that  the  revocation  of  a 
power  may  be,  by  a  direct  and  formal  declaration  publicly 
made  known,  or  bjf  an  informal  writing,  or  by  parol ;  or  it 
may  be  implied  from  circumstances,  and  he  nowhere  inti- 
mates, nor  do  any  of  the  authorities  we  have  looked  into, 
that  when  the  power  is  created  by  deed,  it  must  be  revoked 
b}r  deed.  And,  as  was  before  remarked,  the  nature  of  the 
connection  between  the  principal  and  the  agent  seems  to  be 
at  war  with  such  a  principle.  It  is  stated,  by  Mr.  Story,  in 
the  same  page,  that  an  agency  may  be  revoked  by  implica- 
tion, and  all  the  text- winters  la}*  down  the  same  doctrine. 
Thus,  if  another  agent  is  appointed  to  execute  powers,  pre- 
viously intrusted  to  some  other  person,  it  is  a  revocation,  in 
general,  of  the  power  of  the  latter.  For  this  proposition, 
Mr.  Story  cites,  Copeland  v.  The  Mercantile  Insurance  Com- 
pany, 6  Pick.  198.  In  that  case,  it  was  decided  that  a  power, 
given  to  one  Pedrick  to  sell  the  interest  of  his  principal  in  a 
vessel,  was  revoked  b}T  a  subsequent  letter  of  instruction  to 
him  and  the  master,  to  sell.  As  then,  an  agent  may  be  ap- 
pointed by  parol,  and  as  the  appointment  of  a  subsequent 
agent  supersedes  and  revokes  the  powers  previously  granted 
to  another,  it  follows,  that  the  power  of  the  latter,  though 
created  by  deed,  may  be  revoked  by  the  principal,  by  parol. 
But  the  case  in  Pickering  goes  further.  The  case  does 
pot  state,  in  so  many  words,  that  the  power  granted  to 
Pedrick  was  under  seal,  but  the  facts  set  forth  in  the  case 
show  that  was  the  fact,  and,  if  so,  it  is  a  direct  authority  in 
this  case.  This  is  the  only  point  raised,  in  the  plaintiff's  bill 
of  exceptions,  as  to  the  judge's  charge. 

(The  court  then  decides  against  the  defendant  upon  his 
appeal  on  a  question  of  costs  and  of  practice.) 

Per  Curiam.    Judgment  affirmed,  on  each   appeal,  and 
each  appellant  must  pay  the  costs  of  his  appeal. 


132  TERMINATION   OF  AGENCY.  [CH.  VI. 

§  65.]        HARTLEY  and  MINOR'S  APPEAL. 
53  Pennsylvania  State,  212.  — 1866. 

Petition  to  Orphans'  Court.  Petition  denied.  Petition- 
ers appeal. 

An  heir  of  the  estate  of  one  Douglas  gave  to  petitioners  a 
power  of  attorney  to  collect  all  money  and  property  coming 
to  her  from  the  estate  of  Douglas,  with  power  to  convey  her 
interest  in  the  real  estate,  the  said  Hartley  and  Minor  to 
receive  as  compensation  for  their  services  one-half  of  the 
net  proceeds  so  recovered.  Later  she  gave  a  like  power 
to  one  Howland,  and  in  it  revoked  that  to  Hartley  and  Minor. 
The  latter  now  petition  the  court,  as  attorneys  for  the  heir, 
for  a  settlement  of  the  administrator's  accounts.  Objected 
to  because  of  power  of  attorney  to  Howland. 

Thompson,  J.  There  was  no  error  committed  by  the  court 
below  in  holding  the  power  of  attorney  of  Hannah  Gallion  to 
the  appellants  to  be  revocable.  It  was  an  ordinary  agene}*, 
constituted  by  letter  of  attorney,  to  act  for  her  to  enforce  a 
settlement  of  his  accounts  by  the  administrator  of  her  father's 
estate,  in  which  she  was  interested,  and  to  collect  any  moneys 
or  property  that  might  belong  or  be  coming  to  her.  For 
these  services  the  attorneys  were  to  have  one-half  of  the  net 
proceeds  of  what  they  might  receive  or  recover  for  her.  The 
plaintiffs  in  error  suppose  that  this  clause  rendered  the  power 
irrevocable  by  their  principal,  under  the  idea  that  it  was  a 
power  coupled  with  an  interest.  This  was  a  mistake,  as  all 
the  authorities  show.  To  impart  an  irrevocable  qualitj-  to  a 
power  of  attorney  in  the  absence  of  any  express  stipulation, 
and  as  the  result  of  legal  principles  alone,  there  must  co-exist 
with  the  power  an  interest  in  the  thing  or  estate  to  be  dis- 
posed of  or  managed  under  the  power.  An  instance  of 
frequent  occurrence  in  practice  ma}'  be  given  of  the  assign- 
ment of  vessels  at  sea,  with  a  power  to  sell  for  the  benefit  of 
the  holder  of  the  power,  or  of  anybody  else  who  may  have 


§  65.]  BLACKSTONE  V.   BUTTERMORE.  133 

advanced  money  and  who  it  was  agreed  should  be  secured  in 
that  way.  So  where  securities  have  been  transferred  with  a 
power  to  sell,  and  generally,  I  presume,  in  all  cases  of  prop- 
erty pledged  for  the  security  of  money  where  there  is  an 
accompanying  authority  to  sell  to  reimburse  the  lender  or 
creditor.  In  Hunt  v.  Bousmanier,  8  Wheat.  174,  this  doc- 
trine is  clearly  and  fully  elucidated  in  the  opinion  of  Marshall, 
C.  J.  In  Bancroft  v.  Ashhurst,  2  Grant,  513,  a  case  tried 
at  Nisi  Prius  before  me,  at  which  my  brethren  sat  as  asses- 
sors, there  is  a  pretty  full  examination  of  the  question  herein 
involved,  and  all  the  authorities  referred  to,  and  the  conclu- 
sion is  fully  in  accordance  with  Hunt  v.  Bousmanier,  and 
sustains  the  above  view  of  a  power  coupled  with  an  interest. 
In  the  case  in  hand,  the  power  and  the  interest  could  not 
co-exist.  The  interest  the  appellants  would  have  would  be  in 
the  net  proceeds  collected  under  the  power,  and  the  exercise  of 
the  power  to  collect  the  proceeds  would  ipso  facto  extinguish 
it  entirety,  or  so  far  as  exercised.  Hence  the  appellants'  inter- 
est would  properly  begin  when  the  power  ended.  This  dis- 
tinction is  noticed  in  Hunt  v.  Bousmanier ;  but  neither  by 
this  test,  nor  by  any  other,  was  the  power  of  attornej^  in 
question  irrevocable,  and  this  judgment  must  be  affirmed. 

Judgment  affirmed. 


§65.]        BLACKSTONE  v.   BUTTERMORE. 
53  Pennsylvania  State,  266.  —  1866. 

Ejectment.  Verdict  and  judgment  for  defendant.  Plain- 
tiff appeals. 

Buttermore  gave  to  one  Davidson  a  power  of  attorney  to 
sell  the  land  in  question,  such  instrument  declaring  that 
"  this  authority  is  irrevocable  before  the  first  day  of  May 
next."  In  April,  Davidson  sold  the  land  to  plaintiff,  but 
defendant  refused  to  perform.  There  was  evidence  that 
defendant  had  revoked  the  power  before  the  sale  to  plaintiff, 


134  TERAHNATION   OF  AGENCY.  [CH.  VI. 

and  that  plaintiff  had  notice  of  the  revocation.  The  court 
charged  that  the  powpr  was  revocable,  and  that  if  it  was 
revoked  and  plaint^  lin^  nntipp  of  it,  hp.  could  not  recover. 

Agnew,  J.  We  have  decided  the  substantial  point  in  this 
case  at  the  present  term  upon  the  appeal  of  Hartley  and 
Minor  from  the  Orphans'  Court  of  Greene  County,  opinion 
by  Thompson,  J.,  53  Pa.  St.  212. 

A  power  of  attorney  constituting  a  mere  agency  is  always 
revocable.  It  is  only  when  OQBfJfid  with  a"  intfflBgli  IB  the 
thing  itself,  or  the  estate  which  is  the  subject  of  the  power, 
it  jajWmpd  fro  bR  iirpvooable,  as  where  it  is  a  security  for 
money  advanced  or  is  to  be  used  as  a  means  of  effectuating 
a  purpose  necessary  to  protect  the  rights  of  the  agent  or 
others.  A  mere  power  like  a  will  is  in  its  very  nature 
revocable  when  it  concerns  the  interest  of  the  principal 
alone,  and  in  such  case  even  an  express  declaration  of 
irrevocability  will  not  prevent  revocation.  An  interest  in 
the  proceeds  to  arise  as  mere  compensation  for  the  service 
of  executing  the  power  will  not  make  the  power  irrevocable. 
Therefore,  it  has  been  held  that  a  mere  employment  to  trans- 
act the  business  of  the  principal  is  not  irrevocable  without  an 
express  covenant  founded  on  sufficient  consideration,  notwith- 
standing the  compensation  of  the  agent  is  to  result  from  the 
business  to  be  performed  and  to  be  measured  by  its  extent. 
Coffin  v.  Landis,  10  Wright,  426.  In  order  to  make  an 
agreement  for  irrevocability  contained  in  a  power  to  transact 
business  for  the  benefit  of  the  principal  binding  on  him,  there 
must  be  a  consideration  for  it  independent  of  the  compensa- 
tion to  be  rendered  for  the  services  to  be  performed.  In  this 
case,  the  object  of  the  principal  was  to  make  sale  solely  for 
his  own  benefit.  The  agreement  to  give  his  agent  a  certain 
sum  and  a  portion  of  the  proceeds,  was  merely  to  cany  out 
his  purpose  to  sell.  But  what  obligation  was  there  upon  him 
to  sell,  or  what  other  interest  beside  his  own  was  to  be  se- 
cured hy  the  sale?  Surety  his  determination  to  sell  for  his 
own  ends  alone  was  revocable.  If  the  reasons  for  making  a 
sale  had  ceased  to  exist,  or  he  should  find  a  sale  injurious  to 


§  6G.]  BRADISH   V.   BELKXAP.  135 

his  interests,  who  had  a  right  to  say  he  should  not  change 
his  mind?  The  interest  of  the  agent  was  only  in  his  com- 
pensation for  selling,  and  without  a  sale  this  is  not  earned. 
A  revocation  could  not  injure  him.  If  he  had  expended 
money,  time,  or  labor,  or  all,  upon  the  business  intrusted  to 
him,  the  power  itself  was  a  request  to  do  so,  and  on  a  revo- 
cation would  leave  the  principal  liable  to  him  on  his  implied 
assumpsit.  But  it  would  be  the  height  of  injustice  if  the 
power  should  be  held  to  be  irrevocable  merely  to  secure  the 
agent  for  his  outlay  or  his  services  rendered  before  a  sale. 
The  following  authorities  are  referred  to :  Hunt  v.  Rous- 
manier,  8  Wheat.  174;  Story  on  Agency,  §§  463,  464, 
465,  468,  476,  477;  Paley  on  Agency,  155;  1  Parsons  on 
Cont.  59  ;  Irwin  v.  Workman,  3  Watts,  357 ;  Smyth  v. 
Craig,  3  W.  &  S.  14. 

The  judgment  is  therefore  affirmed. 


§  66.]  BRADISH  v.  BELKNAP  et  al. 

41  Vermont,  172.— 1868. 

Action  on  book  account.  Judgment  for  plaintiff  on  the 
special  report  of  the  auditor.     Exceptions  by  defendants. 

Pierpont,  C.  J.  The  report  in  this  case  shows  that,  for  a 
long  period  prior  and  up  to  1863,  one  Brockway  was  the 
agent  of  the  defendants  in  taking  stoves  about  the  country, 
and  selling  them  as  he  could  find  purchasers.  This  fact  was 
generally  known,  and  was  well  known  to  the  plaintiff.  In  1863 
Brockwa}T  and  the  defendants  changed  their  arrangement, 
and  Brockway  ceased  to  be  their  agent  in  fact ;  but  he  con- 
tinued the  business  of  selling  stoves,  which  he  took  of  the 
defendants  as  before.  It  does  not  appear  that  this  new 
arrangement  was  known  to  an}'  one  except  Brockway  and 
the  defendants.  No  public  notice  was  given  of  the  fact. 
Brockwa}'  continued  to  hold  himself  out  to  the  world  as  the 
agent  of  the  defendants  in   the  business,   and  was  in  the 


136  TERMINATION    OF  AGENCY.  [CH.  VI. 

habit  of  taking  notes  for  stoves  sold,  payable  to  the  de- 
fendants ;  aud  this  was  known  to  the  defendants. 

While  the  business  was  being  so  conducted,  the  plaintiff, 
believing  Brockway  to  be  the  agent  of  the  defendants,  pro- 
posed to  Brockway  to  buy  a  stove  of  him  and  pay  in  pine 
lumber.  Brockway  said  he  was  selling  the  stoves  for  the 
defendants,  and,  if  they  wanted  the  lumber,  he  would  take 
it  and  let  him  have  the  stove.  Afterward  Edson,  one  of  the 
defendants,  went  to  the  plaintiff's,  looked  at  the  lumber, 
ascertained  the  price,  and  said  it  would  answer  their  pur- 
pose. Afterward  Edson  went  to  the  plaintiff's,  and  measured 
out  a  part  of  the  lumber,  and  laid  it  by  itself,  and  the 
plaintiff  and  Brockway  subsequently  measured  out  the  re- 
mainder of  the  lumber  charged,  and  the  defendants  and 
Brockway  drew  it  away,  and  the  defendants  converted  it  to 
their  own  use.  The  plaintiff  charged  the  lumber  to  the 
defendants,  and  took  the  stove,  giving  the  defendants  credit 
for  it  against  the  lumber. 

Brockway  during  all  this  time  was  perfectly  poor  and 
irresponsible,  and  this  fact  was  known  by  both  parties. 
Brockway  represented  himself  as  the  agent  of  the  defen- 
dants, and  the  conduct  of  the  defendants  was  such  as  to 
justify  the  plaintiff  in  regarding  them  as  the  principals ;  and 
we  can  hardly  conceive  it  possible  under  the  circumstances, 
that  the  defendants  did  not  understand  that  the  plaintiff 
so  regarded  them.  And  to  allow  them  now  to  deny  the 
agency  and  thus  defeat  the  plaintiff's  right  to  recover  for  the 
balance  of  the  lumber,  would  be  permitting  them  to  per- 
petrate a  palpable  fraud  on  the  plaintiff. 

Judgment  of  the  county  court  is  affirmed. 


§  70.]  TURNER  V.   GOLDSMITH.  137 


3.  By  change  affecting  subject-matter. 

§  70.]  TURNER  v.  GOLDSMITH. 

1891.     1  Queen's  Bench  (C.  A.),  544. 

Action  for  damages  for  breach  of  contract  of  employment. 
Defence,  destruction  of  defendant's  manufactory  by  fire. 
Judgment  for  defendant.     Plaintiff  appeals. 

Lindley,  L.  J.  This  is  an  action  for  breach  of  contract  in 
not  employing  the  plaintiff  for  the  period  of  five  j-ears.  The 
contract  turns  upon  the  construction  of  the  agreement 
entered  into  by  the  parties,  and  the  application  of  it  in  the 
events  which  have  happened.  The  plaintiff  wished  to  act  as 
traveller  to  the  defendant,  and  the  defendant  wished  to 
engage  him  in  that  capacity.  An  agreement,  dated  January 
31, 1887,  was  entered  into  between  them,  which  contained 
this  recital :  — 

"  Whereas,  in  consideration  of  the  agreement  of  the  said 
A.  S.  Turner,  the  said  company"  {i.e.,  Mr.  Goldsmith, 
and  an}-  partner  he  might  have)  "  agree  to  employ  the  said 
A.  S.  Turner  as  their  agent,  canvasser,  and  traveller,  upon 
the  terms  and  subject  to  the  stipulations  and  conditions 
hereinafter  contained  ;  and  in  consideration  of  the  premises 
the  said  A.  S.  Turner  hereby  agrees  with  the  said  company 
that  he,  the  said  A.  S.  Turner,  shall  and  will  diligently, 
faithfully,  and  honestly  serve  the  said  company  as  their 
agent,  canvasser,  and  traveller,  upon  the  terms  and  subject 
to  the  stipulations  and  conditions  hereinafter  contained." 

Stopping  there,  we  have  a  clear  agreement  by  the  company 
to  employ  the  plaintiff,  and  by  the  plaintiff  to  serve  the  com- 
pany—  and  on  what  terms?  (1)  That  the  agency  shall 
commence  as  from  January  31,  1887,  and  shall  be  deter- 
minable either  by  the  company  or  Turner  at  the  end  of  five 
years  from  the  date  of  the  agreement  upon  giving  such  notice 
as  therein  mentioned.  (2)  "  The  said  A.  S.  Turner  shall 
do  his  utmost  to  obtain  orders  for  and  sell  the  various  goods 
manufactured  or  sold  by  the  said  company  as  shall  be  from 


138  TERMINATION   OF  AGENCY.  [CH.  VI. 

time  to  time  forwarded  or  submitted  by  sample  or  pattern 
to  him,  at  list  price,  to  good  and  substantial  customers." 
Clause  5  is  only  material  because  it  repeats  the  words 
"  manufactured  or  sold  by  the  said  company."  The  8th 
clause  provides  for  the  plaintiffs  remuneration  by  a  com- 
mission on  the  goods  sold  by  him.  The  other  clauses  are 
not  material  as  regards  the  question  before  us. 

It  was  contended  by  the  defendant  that  the  agreement  did 
not  contain  any  stipulation  that  the  compan}'  should  furnish 
the  plaintiff  with  an}T  samples,  and  that  there  was,  therefore, 
no  agreement  to  do  what  was  necessary  to  enable  him  to  earn 
commission.  The  answer  to  that  is,  that  the  company  would 
not  be  employing  the  plaintiff  within  the  meaning  of  the 
agreement  unless  they  supplied  him  with  samples  to  a  reason- 
able extent.  Then  it  was  said  that  there  is  no  undertaking 
by  the  company  to  go  on  manufacturing.  It  is  true  that 
there  is  no  express,  nor,  so  far  as  I  see,  an}'  implied  under- 
taking by  the  company  to  manufacture  even  a  single  shirt ; 
they  might  bu}'  the  articles  in  the  market.  The  defendant's 
place  of  business  was  burned  down ;  the  defendant  has  given 
up  business,  and  has  made  no  effort  to  resume  it.  The 
plaintiff  then  says,  "  I  am  entitled  to  damages  for  your 
breach  of  the  agreement  to  employ  me  for  five  j-ears."  The 
defendant  pleads  that  the  agreement  was  conditional  on  the 
continued  existence  of  his  business.  On  the  face  of  the 
agreement  there  is  no  reference  to  the  place  of  business,  and 
no  condition  as  to  the  defendant's  continuing  to  manufacture 
or  sell.  How,  then,  can  such  a  condition  as  the  defendant 
contends  for  be  implied  ? 

It  was  contended  that  the  point  was  settled  by  authority. 
I  will  refer  to  three  cases  on  the  subject.  In  Rhodes  v. 
Forwoocl,  1  App.  Cas.  256,  it  was  held  that  an  action  very 
similar  to  the  present  was  not  maintainable.  But  that  case 
went  on  the  ground  that,  there  not  being  any  express  con- 
tract to  employ  the  agent,  such  a  contract  could  not  be 
implied.  In  the  present  case  we  find  an  express  contract  to 
employ  him. 


§  70.]  TURKER  V.   GOLDSMITH.  139 

In  Cowasjee  Nanabhoy  v.  Lallbhoy  Vullubhoy,  Law  Rep. 
3  Ind.  App.  200,  there  was  a  contract  in  a  partnership  deed 
to  employ  one  of  the  partners  during  his  life  as  sole  agent  to 
effect  purchases  and  sales  on  behalf  of  the  partnership  at  a 
commission  upon  his  sales.  The  partnership  was  dissolved 
by  decree  of  the  High  Court  of  Bombay  on  the  ground  that 
the  business  could  not  be  carried  on  at  a  profit.  It  was  held 
that  the  employment  was  to  sell  on  behalf  of  the  partnership  ; 
that,  the  partnership  having  come  to  an  end,  the  employ- 
ment ceased,  and  that  the  partner  could  not  claim  any 
compensation,  for  that  a  contract  to  carry  on  the  partner- 
ship during  the  claimant's  life  under  all  circumstances  coulu 
not  be  implied. 

Taylor  v.  Caldwell,  3  B.  &  S.  826,  833,  contains  some  ob- 
servations which  are  very  much  in  point.  Blackburn,  J., 
there  says:  "There  seems  no  doubt  that  where  there  is  a 
positive  contract  to  do  a  thing  not  in  itself  unlawful,  the 
contractor  must  perform  it  or  pay  damages  for  not  doing  it, 
although  in  consequence  of  unforeseen  accidents  the  perform- 
ance of  his  contract  has  become  unexpectedly  burdensome  or 
even  impossible.  .  .  .  But  this  rule  is  only  applicable  when 
the  contract  is  positive  and  absolute,  and  not  subject  to  any 
condition,  either  express  or  implied,  and  there  are  authorities 
which  we  think  establish  the  principle  that  where  from  the 
nature  of  the  contract  it  appears  that  the  parties  must  from 
the  beginning  have  known  that  it  could  not  be  fulfilled, 
unless  when  the  time  for  the  fulfilment  of  the  contract 
arrived  some  particular  specified  thing  continued  to  exist,  so 
that  when  entering  into  the  contract  they  must  have  contem- 
plated such  continuing  existence  as  the  foundation  of  what 
was  to  be  done,  then,  in  the  absence  of  any  express  or  im- 
plied warranty  that  the  thing  shall  exist,  the  contract  is  not 
to  be  construed  as  a  positive  contract,  but  as  subject  to  an 
implied  condition  that  the  parties  shall  be  excused  in  case 
before  breach  performance  becomes  impossible  from  the  per- 
ishing of  the  thing  without  default  of  the  contractor."  The 
substance  of  that  is  that  the  contract  will  be  treated  as  sud- 


140  TERMINATION   OF  AGENCY.  [CH.  VI. 

ject  to  an  implied  condition  that  it  is  to  be  in  force  only  so 
long  as  a  certain  state  of  things  continues,  in  those  cases 
only  where  the  parties  must  have  contemplated  the  continu- 
ing of  that  state  of  things  as  the  foundation  of  what  was  to 
be  done.  Here  the  parties  cannot  be  taken  to  have  con- 
templated the  continuance  of  the  defendant's  manufactory 
as  the  foundation  of  what  was  to  be  done ;  for,  as  I  have 
already  observed,  the  plaintiffs  employment  was  not  con- 
fined to  articles  manufactured  by  the  defendant.  The  action 
therefore,  in  my  opinion,  is  maintainable. 

The  plaintiff  then  is  entitled  to  damages,  and  in  mj-  opin- 
ion not  merely  to  nominal  damages ;  for,  if  I  am  right  in  my 
construction  of  the  agreement,  he  has  suffered  substantial 
loss.  We  think,  however,  that  £125  is  too  much,  and  the 
plaintiffs  counsel  having  agreed  to  take  our  assessment  of 
damages  rather  than  be  sent  to  a  new  trial,  we  assess  them 
at  £50,  and  direct  judgment  to  be  entered  for  the  plaintiff 
for  that  amount. 

Kay,  L.  J.  The  Lord  Justice  Lopes  desires  me  to  say 
that  he  concurs  in  our  decision.  If  it  had  been  shown  that 
not  only  the  manufactory  but  the  business  of  the  defendant 
had  been  destroyed  by  vis  major,  without  any  default  of  the 
defendant,  I  think  that  the  plaintiff  could  not  recover.  But 
there  is  no  proof  that  it  is  impossible  for  the  defendant  to 
carry  on  business  in  articles  of  the  nature  mentioned  in  the 
agreement.  The  contract  is  peculiar;  it  is  to  employ  the 
plaintiff  for  five  years  certain,  with  power  to  either  party  to 
determine  the  employment  at  the  end  of  that  time  by  notice. 
The  defendant  has  ceased  to  employ  the  plaintiff  within  the 
five  years,  and  contends  that  a  condition  is  to  be  implied 
that  the  manufactory  must  continue  to  exist.  The  plaintiff 
is  not  seeking  to  import  anything  into  the  contract ;  the 
defendant  seeks  to  import  the  implied  condition  which  I  have 
mentioned.  I  cannot  import  any  such  condition.  If  it  had 
been  proved  that  the  defendant's  power  to  carry  on  business 
had  been  taken  away  by  something  for  which  he  was  not 
responsible,  I  should  say  that  there  was  no  breach  of  the 


§  71.]  LONG  V.   THAYER.  141 

agreement ;  but  here  it  was  not  taken  away,  and  our  decision 
is  quite  consistent  with  the  class  of  cases  where  the  parties 
have  been  excused  from  the  performance  of  a  contract,  be- 
cause it  was  considered  to  be  subject  to  an  implied  condition. 

Appeal  allowed.1 

4.  By  death. 

§  71.]  LONG  v.  THAYER. 

150  United  States,  520.  — 1893. 

Bill  in  equity  filed  by  Thayer  to  enjoin  enforcement  of  a 
judgment  of  ejectment  obtained  by  Long  against  one  Smith, 
a  tenant  under  Thayer.  Judgment  for  Thaj'er,  upon  condi- 
tion that  he  pay  into  court  $126.25,  with  interest,  and  decree 
that  Long  deposit  quit-claim  deed,  etc.    Long  appeals. 

Thayer  bought  the  lot  in  question  of  Skiles  and  Western 
under  a  contract  made  with  their  agent  Kinney,  by  which 
upon  non-payment  of  future  instalments  (amounting  to 
$252.50),  Thayer  was  to  forfeit  the  contract.  Western  died 
soon  after.  The  instalments  were  paid  by  Thayer  to  Kinney 
after  Western's  death,  one  being  paid  before  he  knew  of 
Western's  death  and  one  after  he  knew  of  it.  Long  is  the 
grantee  from  Western's  heirs,  who  had  by  partition  proceed- 
ings succeeded  to  Skiles'  interest  also. 

Mr.  Justice  Brown  (after  stating  the  case)  delivered  the 
opinion  of  the  court 

This  case  turns  largely  upon  the  legal  effect  to  be  given  to 
the  death  of  Western,  which  took  place  a  few  days  after  the 
contract  for  the  sale  of  the  land  was  made,  and  before  the 
first  note  became  due.  Had  Western  not  died,  there  can  be 
no  question  that  the  payments  to  Kinney  would  have  been 
good,  and  that  Thayer  would  have  been  entitled  to  a  deed. 

Western's  death  undoubtedly  operated  as  a  revocation  of 
Kinney's  authority  to  act  for  him  or  his  estate.    The  pay- 

1  Compare  Steuxtrt  y.  Stone,  127  N.  Y.  500,  where  it  was  held  that 
defendant  was  excused  from  his  contract  to  manufacture  and  sell  cheese 
from  milk  furnished  by  plaintiff,  by  the  destruction  of  defendant's  factory. 


142  TERMINATION   OF  AGENCY.  [CH.  VI. 

rnents  made  to  Kinney  as  his  agent  would  not  be  sufficient  to 
discbarge  Thayer's  obligation  to  bis  estate,  even  if  such  pay- 
ments were  made  by  him  in  actual  ignorance  of  Western's 
death.  Michigan  Insurance  Co.  v.  Leavenworth,  30  Ver- 
mont, 11;  Davis  v.  Windsor  Savings  Bank,  46  Vermont, 
728  ;  Jenkins  v.  Atkins,  1  Humphre}*  (Tenn.),  294  ;  Clayton 
v.  Merrett,  52  Mississippi,  353 ;  Lewis  v.  Kerr,  17  Iowa,  73. 
Indeed  it  was  said  by  this  court  in  Gait  v.  Galloway,  4  Pet. 
332,  344,  that  "no principle  is  better  settled,  than  that  the 
powers  of  an  agent  cease  on  the  death  of  his  principal.  If  an 
act  of  agency  be  done,  subsequent  to  the  decease  of  the  prin- 
cipal, though  his  death  be  unknown  to  the  agent,  the  act  is 
void." 

Whether  Western's  death  also  operated  as  a  revocation  of 
the  verbal  authority  given  by  Skiles  ma}'  admit  of  some  doubt, 
although  the  weight  of  authority  is  that  the  death  of  one  part- 
ner or  joint  owner  operates,  in  the  case  of  a  partnership,  to 
dissolve  the  partnership,  and  in  the  case  of  a  joint  tenancy 
to  sever  the  joint  interest ;  and  the  authority  of  an  agent 
appointed  by  a  firm  or  joint  owners  thereupon  ceases,  where 
such  authority  is  not  coupled  with  an  interest.  McNaughton 
v.  Moore,  1  Haywood  (N.  C),  189 ;  Howe  v.  Band,  111 
Indiana,  206. 

But  even  if  it  did  operate  as  a  technical  revocation  of  Kin- 
ney's authority  to  act  for  Skiles,  the  presumption  is,  from 
Skiles'  long  silence,  in  the  absence  of  proof  to  the  contrarjr, 
that  Kinney  accounted  to  him  for  his  proportion  of  the  money 
collected.  The  court  below  evidently  proceeded  upon  this 
theory,  and  required  Thayer,  as  a  condition  for  calling  upon 
Long  for  a  deed,  to  repay  one-half  of  the  amount  of  the  two 
notes  with  the  stipulated  interest  at  10  per  cent.  These  were 
certainly  as  favorable  terms  as  Long  could  expect.  Thayer 
had  paid  the  money  to  Kinney,  with  whom  the  contract  was 
made,  —  the  first  payment  in  actual  ignorance  of  Western's 
death,  and  the  second  doubtless  under  the  supposition,  which 
a  person  unlearned  in  the  law  might  reasonably  entertain, 
that  payment  to  the  person  with  whom  the  contract  was  made 


§  71.]  LONG  V.   THAYER.  143 

was  sufficient,  and  that  Kinney  would  account  to  the  proper 
representatives  of  Western,  and  procure  him  a  deed.  All  the 
equities  of  the  case  were  in  Thayer's  favor,  and  justice  de- 
manded that  Long  should  be  required  to  convey,  upon  being 
paid  Western's  share  of  the  consideration  with  interest. 

There  is  another  view  of  the  case  which  does  not  seem  to 
have  been  presented  to  the  court  below,  and  which  indicates 
that  Long  received  even  more  than  he  was  really  entitled  to. 
The  second  note  of  $150,  which  is  produced,  appears  upon  its 
face  to  have  been  payable  to  "  J.  F.  Kinnej-  or  bearer,"  and 
while  the  first  note  is  not  produced,  Kinney  swears  that  this 
was  also  paj'able  in  the  same  manner.  The  probabilities  are 
that  it  was,  both  from  the  fact  that  the  second  note  was 
payable  to  bearer  and  from  the  further  fact  that  Kinney 
claimed  that  Western  was  largely  indebted  to  him.  If  such 
were  the  case  (and  Kinnej-'s  authority  to  take  these  notes  is 
not  disputed),  it  is  difficult  to  see  why  the  payments  to  Kin- 
ne}*,  who  himself  held  the  notes,  were  not  valid  pajments, 
which  entitled  Thayer  to  a  deed  to  the  land.  So  long  as 
these  notes  were  outstanding,  he  could  not  safely  pay  to  anj-- 
one  else,  and  if  he  paid  the  holder,  he  did  just  what  the 
contract  required  him  to  do. 

Long  clearly  was  not  an  innocent  purchaser  of  the  land  in 
question.  Not  only  had  Thayer  been  in  the  open,  notorious, 
and  unequivocal  possession  of  the  land  and  its  impi'ovement, 
renting  the  premises  and  paying  the  taxes,  but  Long's  mar- 
riage into  the  Western  family,  his  taking  a  deed  from  the 
heirs  through  Mr.  Meriwether,  the  husband  of  one  of  the 
heirs,  who  acted  as  attornejT  both  for  Long  and  for  the  heirs, 
and  the  giving  of  a  promissory  note  unsecured  by  mortgage 
upon  the  land, — a  note  which  the  heirs  apparently  never  saw, 
—  indicate  very  clearly  that  he  could  not  have  been  ignorant 
of  the  true  situation. 

The  decree  of  the  court  below  was  clearly  right,  and  must 
be  Affirmed. 


144  TERMINATION  OF  AGENCY.  [CH.  VI. 

Farmers'  Loan  &  Trust  Co.  v.  Wilson,  139  N.  Y.  284 
(1893)  :  An  agent  after  the  death  of  his  principal  collected 
rents.  The  plaintiff,  as  trustee,  recovered  judgment  from 
the  defendant  for  the  rents  so  paid.  Neither  the  agent  nor 
the  defendant  knew  of  the  death  of  the  principal  when  the 
rent  was  paid.  Held  (by  O'Brien,  J.)  :  That  the  agency  was 
revoked  b}T  the  death  of  the  principal  and  that  the  payments 
to  the  agent  after  the  death  of  the  principal  did  not  bind  the 
estate.  The  court  says  :  "  The  rule  seems  to  have  originated 
in  the  presumption  that  those  who  deal  with  an  agent  know- 
ingly assume  the  risk  that  his  authority  may  be  terminated  by 
death  without  notice  to  them.  The  case  of  an  agency  coupled 
with  an  interest  is  an  exception  to  the  rule.  .  .  .  The  com- 
mon-law rule  has  become  too  firmly  established  in  this  State 
to  be  disturbed  by  judicial  action,  though  a  change  by  the 
law-making  power  would  be  in  harmony  with  more  enlightened 
views  and  would  promote  the  interests  of  justice." 


5    By  insanity. 

|n.]  DREW  v.  NUNN. 

L.  R.  4  Queen's  Bench  Division  (C.  A.),  661.  — 1879. 
[Reported  herein  at  p.  24.] 

6.  Irrevocable  agencies. 

§  72.]    ROLAND,  Administrator,  v.  COLEMAN  AND 
COMPANY. 

76  Georgia,  652.  — 1886. 

Bill  for  an  injunction  to  enjoin  a  sale  about  to  be  made 
under  a  power  of  sale  contained  in  a  written  instrument 
made  by  the  intestate  to  the  defendants.  Injunction  refused. 
Complainant  appeals. 


§  72.]  ROLAND  V.  COLEMAN.  145 

Jackson,  C.  J.  This  is  a  bill  brought  by  Roland,  admin* 
istrator,  &c,  v.  S.  T.  Coleman  &  Company  to  enjoin  that 
firm  from  selling  certain  lands  conveyed  to  them  to  secure  a 
debt.  The  chancellor  refused  the  writ,  and  the  complainant 
excepted. 

Is  the  paper  a  mortgage,  or  is  it  a  deed  which  passes  the 
title  absolutely  to  Coleman  &  Compan}'  to  secure  certain  in- 
debtedness, with  power  to  sell  in  order  to  pay  the  debt? 

(The  court  then  decides  that  the  instrument  is  a  deed.) 

This  conveyance  also  has  a  power  to  sell,  coupled  with  a 
big  interest  in  the  property,  even  the  title  to  it  to  secure  the 
debt,  and  therefore  the  power  is  irrevocable,  and  does  not 
die  with  the  grantor.  Woodson  v.  Veal,  60  Ga.  562 ; 
Calloway  v.  The  People's  Bank  of  Bellefontaine  et  al.,  54 
Ga.  441. 

Lathrop  &  Co.  v.  Brown,  exW,  et  al.,  65  Ga.  312,  was  a 
mere  mortgage  with  power  to  sell,  which  was  revocable,  and 
died  with  the  mortgagor,  the  mortgagees  having  no  interest 
in  the  thing,  but  only  in  the  proceeds.  And  such  is  the  fact 
also  in  Miller,  trustee,  v.  McDonald  et  al.,  72  Ga.  20 ; 
Wofford  v.  Wyly  et  al.,  Id.  863,  is  also  clearly  distinguish- 
able, as  no  time  was  fixed  for  the  payment  of  the  mone}T, 
and  there  was  a  written  obligation  to  reconvey  and  no 
power  to  sell,  but  nothing  ruled  there  conflicts  with  aught 
said  here.  There  were  mortgages  with  power  to  sell  without 
regular  foreclosure,  but  with  no  pretence  that  the  title  passed. 
In  the  case  at  bar,  the  title  did  pass,  and  this  great  interest 
in  the  land  itself  made  the  power  here  irrevocable  after  the 
grantor's  death. 

•  •  •  •  •  .  . 

Judgment  affirmed. 


146  TERMINATION   OF  AGENCY.  [CH.  VL 


§  72]       HUNT  v.   ROUSMANIER'S   ADMINIS- 
TRATORS. 
8  Wheaton  (U.  S.),  174.—  1823. 

Bill  in  equity  to  compel  defendants,  as  administrators,  to 
join  in  the  sale  of  the  intestate's  interest  in  two  vessels. 
Demurrer  to  the  bill  sustained  and  the  bill  dismissed. 
Plaintiff  appeals. 

Rousmanier  executed  to  Hunt  a  power  of  attorney  authoriz- 
ing Hunt  to  sell  and  convey  Rousmanier's  interest  in  the 
two  vessels,  and  after  paying  two  notes  owing  from  Rous- 
manier to  Hunt,  to  return  the  residue  to  Rousmanier. 
Rousmanier  died  before  the  payment  in  full  of  the  two  notes. 
Hunt  took  possession  of  the  vessels  and  was  proceeding  to 
sell  them  when  defendants  forbade  the  sale. 

Mr.  Chief  Justice  Marshall  delivered  the  opinion  of  the 
court. 

The  counsel  for  the  appellant  objects  to  the  decree  of  the 
circuit  court  on  two  grounds.     He  contends, — 

1.  That  this  power  of  attorney  does,  by  its  own  operation, 
entitle  the  plaintiff,  for  the  satisfaction  of  his  debt,  to  the 
interest  of  Rousmanier  in  the  Nereus  and  the  Indusfay. 

2.  Or,  if  this  be  not  so,  that  a  court  of  chancery  will,  the 
conveyance  being  defective,  lend  its  aid  to  carry  the  contract 
into  execution,  according  to  the  intention  of  the  parties. 

We  will  consider,  1 .  The  effect  of  the  power  of  attorney. 

This  instrument  contains  no  words  of  conveyance  or  of 
assignment,  but  is  a  simple  power  to  sell  and  convey.  As  the 
power  of  one  man  to  act  for  another  depends  on  the  will 
and  license  of  that  other,  the  power  ceases  when  the  will,  or 
this  permission,  is  withdrawn.  The  general  rule,  therefore^, 
is,  that  a  letter  of  attorney  may,  at  any  time,  be  revoked  by 
the  party  who  makes  it,  and  is  revoked  by  his  death.  But 
this  general  rule,  which  results  from  the  nature  of  the  act, 
has  sustained  gome  modification.  Where  a  letter  of  attorney 
forms  a.  Bart  of  a  contract,  and  is  a  security  for  money ^  or 


§  72.]  HUNT  V.   ROUSMANIER.  147 

for  the  performance  of  any  act  which  is  deemed  valuable,  it 
is  generally  made  irrevocable  in  terms,  or  if  not  so,  is 
deemed  irrevocable  in  law.  2  Esp.  N.  P.  Rep.  565.  Al- 
though letter  nf  attorney  depends,  from  its  nature,  on  the 
will  of  the  person  making  itt  and  may,  in  general,  be  recalled 
at  his  will,  yet  if  he  binds  himself  for  a  consideration,  in 
terms,  or  by  the  nature  of  his  contract,  not  to  change  his 
will,  the  law  will  not  permit  him  to  change  it.  Rousmanier, 
therefore,  could  not,  during  his  life,  by  any  act  of  his  own, 
have  revoked  this  letter  of  attorney.  But  does  it  retain  its 
efficacy  after  his  death?  We  thinkjt  does  not.  We  think 
it  wpl^ppt.tlpfl,  flat  grower  of  attorney,  though  irrevocable 
duringjha-life-of^the  part}',  becomes  extinct  by  his_death. 

This  principle  is  asserted  in  Littleton  (sec.  66),  b}^  Lord 
Coke,  in  his  commentary  on  that  section  (52  b),  and  in 
Willes'  Reports  (105,  note,  and  565).  The  legal  reason  of 
the  rule  is  a  plain  one.  It  seems  founded  on  the  presump- 
tion, that  the  substitute  acts  by  virtue  of  the  authority  of  his 
principal,  existing  at  the  time  the  act  is  performed  ;  and  on 
the  manner  in  which  he  must  execute  his  authorit}-,  as  stated 
in  Coombes'  case,  9  Co.  766.  In  that  case  it  was  resolved, 
that  "  when  any  has  authority  as  attorney  to  do  any  act,  he 
ought  to  do  it  in  his  name  who  gave  the  authority. "  The 
reason  of  this  resolution  is  obvious.  The  title  can,  regularly, 
pass  out  of  the  person  in  whom  it  is  vested,  only  by  a  con- 
veyance in  his  own  name ;  and  this  cannot  be  executed  by 
another  for  him,  when  it  could  not,  in  law,  be  executed  by 
himself.  A  conveyance  in  the  name  of  a  person  who  was 
dead  at  the  time  would  be  a  manifest  absurdity. 

This  general  doctrine,  that  a  power  must  be  executed  in 
the  name  of  a  person  who  gives  it,  a  doctrine  founded  on 
the  nature  of  the  transaction,  is  most  usualty  engrafted  in  the 
power  itself.  Its  usual  language  is,  that  the  substitute  shall 
do  that  which  he  is  empowered  to  do  in  the  name  of  his 
principal.  He  is  put  in  the  place  and  stead  of  his  principal, 
and  is  to  act  in  his  name.  This  accustomed  form  is  observed 
in  the  instrument  under  consideration.     Hunt  is  constituted 


148  TERMINATION   OF  AGENCY.  [CH.  VI. 

the  attorneys  and  is  authorized  to  make  and  execute  a  regular 
bill  of  sale  in  the  name  of  Rousmanier.  Now,  as  an  authority 
must  be  pursued  in  order  to  make  the  act  of  the  substitute 
the  act  of  the  principal,  it  is  necessary  that  this  bill  of  sale 
should  be  in  the  name  of  Rousmanier ;  and  it  would  be  a 
gross  absurdity  that  a  deed  should  purport  to  be  executed  by 
him,  even  by  attorney,  after  his  death ;  for  the  attorne}'  is 
in  the  place  of  the  principal,  capable  of  doing  that  alone 
which  the  principal  might  do. 

This  general  rule,  that  a  power  ceases  with  the  life  of  the 
person  giving  it.  admits  of  one  exception.  If  a  power  bft 
coupled  with  an  "interest."  it  survives  the  person  givjng  jt. 
and  may  be  executed  after  his  death. 

As  this  proposition  is  laid  down  too  positively  in  the  books 
to  be  controverted,  it  becomes  necessary  to  inquire  what  is 
meant  by  the  expression,  "  a  power  coupled  with  an  interest?  " 
Is  it  an  interest  in  the  subject  on  which  the  power  is  to  be 
exercised,  or  is  it  an  interest  in  that  which  is  produced  by  the 
exercise  of  the  power?  We  hold  it  to  be  clear  that  the  interest 
which  can  protect  a  power  after  the  death  of  a  person  who  cre- 
ates it,  niust  be  an  interest  in  the  thing  itself.  In  other  words, 
the  power  must  be  engrafted  on  an  estate  in  the  thing. 

The  words  themselves  would  seem  to  import  this  meaning. 
"A  power  coupled  with  an  interest,"  is  a  power  which 
accompanies,  or  is  connected  with,  an  interest.  The  power 
and  the  interest  are  united  in  the  same  person.  But  if  we 
are  to  understand  the  word  "interest,"  an  interest  in  that 
which  is  to  be  produced  by  the  exercise  of  the  power,  then 
they  are  never  united.  The  power,  to  produce  the  interest, 
must  be  exercised,  and  by  its  exercise  is  extinguished.  The 
power  ceases  when  the  interest  commences,  and  therefore  can- 
not, in  accurate  law  language,  be  said  to  be  "  coupled  "  with  it. 

But  the  substantial  basis  of  the  opinion  of  the  court  on 
this  point  is  found  in  the  legal  reason  of  the  principle.  The 
interest  or  title  in  the  thing  being  vested  in  the  person  who 
gives  the  power,  remains  in  him,  unless  it  be  conveyed  with 
the  power,  and  can  pass  out  of  him  only  by  a  regular  actin 


§  72.]  HUNT  V.   ROUSMANTEK.  149 

his  own  name.  The  act  of  the  substitute,  therefore,  which  in 
such  a  case  is  the  act  of  the  principal,  to  be  legally  effectual 
must  be  in  his  name,  must  be  such  an  act  as  the  principal 
himself  would  be  capable  of  performing,  and  which  would  be 
valid  if  performed  by  him.  Such  a  power  necessarily  ceases 
with  the  life  of  the  person  making  it.  Bj^t  if  the  interest  or 
estate  passes  with  the  power,  and  vests  in  the  person  bv 
whom  the  power  is  to  bfr  exercised,  such  a  person  acts  in  his 
ojyn  name.  The  estate,  being  in  him,  passes  from  him  by  a 
conveyance  in  his  own  name.  He  is  no  longer  a  substitute, 
acting  in  the  place  and  name  of  another,  but  is  a  principal 
acting  in  his  own  name,  in  pursuance  of  powers  which  limit  his 
estate.  The  legal  reason  which  limits  a  power  to  the  life  of 
the  person  giving  it  exists  no  longer,  and  the  rule  ceases  with 
the  reason  on  which  it  is  founded.  The  intention  of  the  in- 
strument ma}*  be  effected  without  violating  any  legal  principle. 
This  idea  maj"  be  in  some  degree  illustrated  bj*  the  examples 
of  cases  in  which  the  law  is  clear,  and  which  are  incompatible 
with  any  other  exposition  of  the  term,  "  power  coupled  with 
an  interest."  If  the  word  "  interest"  thus  used  indicated  a 
title  to  the  proceeds  of  the  sale,  and  not,  a  title  to  the  thing  to 
be  sold,  then  a  power  to  A.  to  sell  for  his  own  benefit,  would 
be  a  power  coupled  with  an  interest^  but  a  power  to  A.  to 
sell  for  the  benefit  of  B.  would  be  a  naked  power,  which  could 
be  executed  onl\-  in  the  life  of  the  person  who  gave  it.  Yet, 
for  this  distinction,  no  legal  reason  can  be  assigned.  Nor  is 
there  any  reason  for  it  in  justice ;  for  a  power  to  A.  to  sell 
for  the  benefit  of  B.  may  be  as  much  a  part  of  the  contract  on 
which  B.  advances  his  money  as  if  the  power  had  been  made 
to  himself.  If  this  were  the  true  exposition  of  the  term,  then 
a  power  to  A.  to  sell  for  the  use  of  B.,  inserted  in  a  convey- 
ance to  A.,  of  the  thing  to  be  sold,  would  not  be  a  power 
coupled  with  an  interest,  and  consequently  could  not  be  exer- 
cised after  the  death  of  the  person  making  it ;  while  a  power 
to  A.  to  sell  and  pay  a  debt  to  himself,  though  not  accompanied 
with  any  conveyance  which  might  vest  the  title  in  him,  would 
enable  him  to  make  the  conveyance,  and  to  pass  a  title  not  in 


150  TERMINATION   OF  AGENCY.  [CH.  VI. 

him,  even  after  the  vivifying  principle  of  the  power  had 
become  extinct  But  ever}'  day's  experience  teaches  us  that 
the  law  is  not  as  the  first  case  put  would  suppose.  We  know 
that  a  power  to  A.  to  sell  for  the  benefit  of  R.f  engrafted  on 
an  estate  conveyed  to  A.,  may  be  exercised  at  anv  time,  and 
is  not  affected  bv  the  Healh  of  the  person  who  created  it.  It 
is^then,  a  power  coupled  with  an  interest,  although  the  person 
to  whom  it  is  given  has  no  interest  in  ita  e-geroiapj  His  power 
is  coupled  with  an  interest  in  the  thing  which  enables  him  to 
execute  it  in  his  own  name,  and  is.  tbereforet  not  dependent 
on  the  life  of  the  person  who  nreflten1  [t. 

The  general  rule,  that  a  power  of  attorney,  though  irrevo- 
cable by  the  party  during  his  life,  is  extinguished  by  his  death, 
is  not  affected  by  the  circumstance  that  testamentaiy  powers 
are  executed  after  the  death  of  the  testator.  The  law,  in 
allowing  a  testamentaiy  disposition  of  property,  not  only  per- 
mits a  will  to  be  considered  as  a  conveyance,  but  gives  it  an 
operation  which  is  not  allowed  to  deeds  which  have  their  effect 
during  the  life  of  the  person  who  executes  them.  An  estate 
given  by  will  may  take  effect  at  a  future  time  or  on  a  future 
contingency,  and  in  the  meantime  descends  to  the  heir.  The 
power  is  necessarily  to  be  executed  after  the  death  of  the  per- 
son who  makes  it,  and  cannot  exist  during  his  life.  It  is  the 
intention  that  it  shall  be  executed  after  his  death.  The  convey- 
ance made  by  the  person  to  whom  it  is  given  takes  effect  by 
virtue  of  the  will,  and  the  purchaser  holds  his  title  under  it. 
Every  case  of  a  power  given  in  a  will  is  considered  in  a  court  of 
chancery  as  a  trust  for  the  benefit  of  the  person  for  whose  use 
the  power  is  made,  and  as  a  devise  or  bequest  to  that  person. 

It  is,  then,  deemed  perfectly  clear  that  the  power  given  in 
this  case  is  a  naked  power,  not  coupled  with  an  interest, 
which,  though  irrevocable  b\T  Rousmanier  himself,  expired 
on  his  death. 

(The  court  then  decides  that  upon  the  facts  alleged  in  the 
bill  a  court  of  equity  may  give  relief  as  for  mistake  and  sub- 
ject the  vessels  to  an  equitable  lien  in  favor  of  the  appellant. 
Upon  this  ground  the  decree  was)  Reversed. 


PART   II. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN 
PRINCIPAL  AND  AGENT. 


CHAPTER  VII. 

OBLIGATIONS  OF  PRINCIPAL  TO  AGENT. 

1.   Compensation  for  authorized  act. 

§  75.]       McCRARY,  Surviving  Partner,  etc.  v. 
RUDDICK  et  al. 

33  Iowa,  521.  — 1871. 

Action  to  recover  for  professional  services  rendered  to 
defendants  by  Rankin  &  McCrary,  attorneys  at  law.  Judg- 
ment for  plaintiff. 

The  plaintiff  firm  was  retained  by  one  Galland,  who  had  a 
special  contract  with  defendants  to  conduct  the  suit  in  which 
the  services  were  rendered.  Plaintiff  firm  had  no  knowledge 
of  this  special  contract.  The  court  charged  that  if  defendants 
knew  that  the  plaintiff  firm  was  managing  the  suit,  there 
would  arise  an  implied  promise  to  pay  what  the  services 
we're  reasonably  worth,  even  though  Galland  had  agreed  with 
defendants  to  pay  for  such  services  himself,  unless  the  plain- 
tiff firm  knew  of  this  special  contract  between  defendants 
and  Galland.  The  court  refused  to  charge  that  if  defendants 
never  employed  the  plaintiff  firm,  and  had  reason  to  believe 
that  the  firm  was  acting  for  Galland,  they  would  not  be 
liable. 

Miller,  J.  .  .  .  We  are  of  opinion  that  there  was  no 
error  in  the  ruling  of  the  court. 


152      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.       [CH.  VTI. 

It  will  not  be  questioned  that,  if  the  defendants  had  re- 
quested Rankin  &  McCrary  to  perform  the  services,  with- 
out more  being  said,  the}'  would  have  been  liable  to  pay 
what  their  services  were  reasonably  worth.  Nor  will  it  be 
doubted  that,  if  there  had  been  no  special  contract  between 
Galland  and  the  other  defendants,  and  the  services  had  been 
rendered  with  the  knowledge  of  defendants,  they  would  be 
liable  to  pay  for  them.  The  firm  of  Rankin  &  McCrary 
performed  the  services  for  the  defendants  with  their  knowl- 
edge. They  knew  that  these  attorneys  were  appearing  and 
defending  the  action  in  their  behalf  and  for  their  benefit, 
and,  although  the}'  had  not  requested  Rankin  &  McCrary 
to  render  the  services,  yet,  by  their  silence,  they  assented 
that  they  should  do  so,  and  thereby  rendered  a  previous 
request  unnecessary. 

If  the  defendants  did  not  intend  that  Rankin  &  McCrary 
should  look  to  them  for  payment  for  the  services  they  were 
rendering,  they  should  have  objected,  or  informed  them  of 
the  special  contract ;  but  by  the  silence  of  the  defendants, 
with  full  knowledge  of  what  was  being  done  by  Rankin  & 
McCrary,  and  by  receiving  and  enjoying  the  benefit  of  the 
services  rendered,  a  promise  to  pay  will  be  implied.  2  Par- 
sons on  Cont.  (5th  ed.)  58;  3  Bl.  Com.  161.  See  also  2 
Parsons  on  Cont.  46  ;  Phillips  v.  Jones,  1  Adol.  &  Ell.  333  ; 
JPeacock  v.  Peacock,  2  Camp.  45  ;  Scully  v.  Scully,  28  Iowa, 
548 ;  Waterman  v.  Gilson,  5  La.  An.  672 ;  Lucas  v.  God- 
win, 3  Bing.  (N.  C.)  737;  James  v.  Bixby,  11  Mass.  34; 
Farmington  Academy  v.  Allen,  14  Id.  172. 

It  would  have  been  otherwise  had  Rankin  &  McCrary 
been  informed  of  the  special  agreement,  or  had  the  circum- 
stances been  such  as  to  raise  a  presumption  that  they  had 
such  information.  But  the}'  entered  upon  the  services  at  the 
request  of  one  who  was  himself  a  defendant,  and  they  per- 
formed the  services  with  the  knowledge  and  implied  assent 
and  for  the  benefit  of  all  the  defendants,  without  notice  of 
any  special  agreement  in  regard  to  the  defence  of  the  case. 
Rankin  &  McCrary  had  a  right  to  rely  on  the  promise  which, 


§  77.]                              WILSON  V.  DAME.  153 

under  the  circumstances,  the  law  implied,  unless  they  were 

informed  of  the  special  agreement.     This  information  they 

did  not  possess,  but  the  defendants  did,  and  it  was  their 
fault  that  it  was  not  communicated. 

The  judgment  of  the  district  court  is  Affirmed. 


2.    Compensation  for  unauthorized  act. 
§  77.]  WILSON  v.  DAME. 

58  New  Hampshire,  392.  —  1878. 

Assumpsit,  on  the  common  counts,  to  recover  a  reward  for 
the  apprehension  of  a  criminal.  The  referee  found  for  the 
plaintiff.     Defendant  appeals. 

Bingham,  J.  The  facts  reported  by  the  referee  establish, 
(1)  that  the  defendant,  city  marshal  of  Portsmouth,  desired 
to  arrest  Walters ;  (2)  that  the  plaintiff  rendered  necessary 
and  valuable  services  in  accomplishing  it,  as  the  defendant's 
servant  or  agent,  expecting  to  be  paid  for  them  ;  (3)  that  the 
defendant,  knowing  these  facts,  accepted  the  services,  in- 
tending to  pay  for  them,  and  afterwards,  on  receiving  the 
reward,  promised  the  warder  that  he  would  do  so. 

If  a  person  acts  as  an  agent,  without  authority,  and  the 
principal,  after  full  knowledge  of  the  transaction,  ratifies  it, 
it  will  be  his  act,  the  same  as  if  he  had  originally  given  the 
authority ;  and  the  agent  will  be  entitled  to  the  same  rights 
and  remedies,  and  to  the  same  compensations,  as  if  he  had 
acted  within  the  scope  of  an  acknowledged  original  authority. 
Story  on  Agenc}',  §  244. 

If  the  case  does  not  show  an  original  employment  of  the 
plaintiff,  or  a  request  to  assist  in  the  arrest  and  return  of  the 
convict,  it  clearly  shows  that  the  defendant  accepted  and 
ratified  whatever  the  plaintiff  did,  and  that  the  defendant  is 
liable  to  pay  a  reasonable  compensation  for  the  same.  Hatch 
v.  Taylor,  10  N.  H.  538 ;  Low  v.  Railroad,  45  N.  H.  370 ; 
S.  C.  46  N.  H.  284.  Judgment  on  the  report1 

1  See  also  Gelatt  v.  Ridge,  ante,  p.  99. 


154      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VII. 

3.   Compensation  for  gratuitous  service. 

§  77.]  ALLEN  v.  BRYSON. 

67  Iowa,  591.  — 1885. 

Action  to  recover  compensation  for  professional  services. 
Judgment  for  plaintiff     Defendant  appeals. 

Seevers,  J.  .  .  .  The  defendant  pleaded  that  he  and  the 
plaintiff  were  brothers-in-law,  and,  in  substance,  that  each  of 
them  was  engaged  in  the  practice  of  the  law,  and  had  been 
in  the  habit  of  assisting  each  other  as  a  matter  of  mutual 
accommodation,  and  that  "  all  and  each  of  the  professional 
services  for  which  plaintiff  seeks  to  recover  in  this  action 
were  rendered  by  him  as  matter  of  mutual  accommodation 
and  interchange  of  courtesies,  and  without  charge  or  expecta- 
tion of  payment  or  reward,  by  one  as  against  the  other." 
The  court  instructed  the  jury:  "If,  however,  such  services 
were  rendered  by  the  plaintiff  without  expectation  of  reward, 
or  intention  on  his  part  to  charge  therefor,  or  by  any  agree- 
ment or  understanding  that  the  services  were  to  be  gratui- 
tous, the  plaintiff  cannot  recover  unless,  after  such  services 
were  rendered,  and  in  consideration  thereof,  defendant  agreed 
with  or  promised  plaintiff  to  pay  for  the  same.  In  the 
latter  case  the  valuable  character  of  the  service,  and  the 
moral  obligation  to  pay  for  the  same,  would  be  a  sufficient 
consideration  to  support  the  promise,  and  enable  the  plaintiff 
to  recover  the  reasonable  value  of  such  service."  We  under- 
stand this  instruction  to  mean  that  where  one  person  renders 
services  for  another  gratuitous^,  and  with  no  expectation  of 
being  paid  therefor,  a  moral  obligation  is  incurred  by  the 
latter  which  will  support  a  subsequent  promise  to  pay.  In 
our  opinion,  this  is  not  the  law.  If  the  services  are  gratui- 
tous, no  obligation,  either  moral  or  legal,  is  incurred  by  the 
recipient.  No  one  is  bound  to  pay  for  that  which  is  a  gratu- 
ity. No  moral  obligation  is  assumed  by  a  person  who  re- 
ceives a  gift     Suppose  the  plaintiff  had  given  the  defendant 


§  79.]  CUTTER  V.   GILLETTE.  155 

a  horse,  was  he  morally  bound  to  pay  what  the  horse  was 
reasonably  worth?  We  think  not.  In  such  case  there  never 
was  any  liability  to  pa}T,  and  therefore  a  subsequent  promise 
would  be  without  any  consideration  to  support  it.  That 
there  are  cases  which  hold  that  where  a  liability  to  pay  at 
one  time  existed,  which,  because  of  the  lapse  of  time,  or  for 
other  reasons,  cannot  be  enforced,  the  moral  obligation  is 
sufficient  to  support  a  subsequent  promise,  will  be  conceded. 
These  cases  are  distinguishable,  because  the  instructions 
contemplate  a  case  where  an  obligation  to  pay  never  existed 
until  the  promise  was  made.  We  do  not  believe  a  case  can 
be  found  where  a  moral  obligation  alone  has  been  held  to  be 
a  sufficient  consideration  for  a  subsequent  promise.  To  our 
minds,  however,  it  is  difficult  to  find  a  moral  obligation  to 
pay  anything,  in  the  case  contemplated  in  the  instructions, 
prior  to  the  promise.  The  following  cases  support  the  view 
above  expressed.  Cook  v.  Bradley,  7  Conn.  57  ;  Williams 
v.  Hathaway,  19  Pick.  387 ;  Dawson  v.  Dawson,  12  Iowa, 
512  ;  McCarty  v.  Hampton  Building  Ass'n,  61  Id.  287. 
■  •  •  •  •  •  . 

Reversed. 


4.  Compensation  after  revocation  of  agency. 

§  79.]  CUTTER  v.   GILLETTE. 

163  Massachusetts,  —  .  — 1895. 
39  Northeastern  Reporter,  1010. 

Action  to  recover  damages  for  breach  of  a  contract  of 
employment  Judgment  for  plaintiff.  Defendant  alleges 
exceptions. 

The  contract  was  for  five  years,  but  defendant  discharged 
plaintiff  after  three  months'  service.  The  court  allowed  dam- 
ages to  be  assessed  to  the  time  of  the  trial,  and  from  the 
trial  to  the  expiration  of  the  five  years.    Plaintiff  had  tried 


156       OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VII. 

to  carry  on  carriage  manufacturing  on  his  own  account  after 
the  breach,  but  had  failed.  Defendant  sought  to  show  that 
plaintiff's  reputation  was  such  that  he  could  not  get  credit, 
but  this  evidence  was  excluded. 

Barker,  J.  The  evidence  offered  and  excluded  from  the 
cross-examination  of  the  plaintiff  was,  in  effect,  that  his  per- 
sonal reputation  as  to  credit  among  dealers  was  so  poor  that 
he  could  not  get  credit  to  carry  on  the  business  in  which  he 
attempted  to  work  after  his  wrongful  discharge  from  the 
defendant's  service.  Assuming  that  the  defendant  was  enti- 
tled to  show  that  the  plaintiff  might  have  earned  more  money 
than  he  did  between  the  time  of  his  discharge  and  the  time 
of  trial,  evidence  of  the  plaintiff's  poor  reputation  for  credit 
among  dealers  did  not  tend  to  show  that  he  could  have  suc- 
ceeded in  the  business,  and  it  was  rightly  excluded,  as  it 
might  have  had  a  tendency  to  prejudice  the  jur}-  against  the 
plaintiff.  If  it  did  not  have  that  effect,  its  only  tendency 
would  seem  to  be  to  enhance  the  plaintiff's  damages.  We  do 
not  see  how  the  defendant  was  harmed  by  the  exclusion  of 
the  evidence. 

The  exception  to  the  refusal  to  instruct  the  jury  to  the 
effect  that  if  the  plaintiff,  after  his  discharge,  began  to  do 
business  on  his  own  account,  he  could  not  recover  damages 
relating  to  the  period  of  time  after  he  so  entered  into  business, 
was  waived  at  the  argument. 

The  remaining  question  is  whether  or  not  the  jury  should 
have  been  allowed  to  assess  damages  for  the  period  of  time 
subsequent  to  the  trial.  The  plaintiff  was  hired  for  five  years 
from  April  25,  1892,  and  was  discharged  about  the  middle 
of  July,  1892.  He  brought  suit  on  November  10, 1892,  and 
the  verdict  was  rendered  on  March  14,  1894.  The  verdict 
assessed  at  the  sum  of  $3,180.95,  the  plaintiff's  whole  damages 
for  breach  of  the  contract  for  hiring,  and  stated  that  of  the 
amount  $1,392.95  was  the  damage  to  the  time  of  trial.  The 
defendant  concedes  that- the  plaintiff  is  entitled  to  recover 
damages  for  an  entire  breach,  so  far  as  such  damages  can 
be  ascertained,  but  contends  that,  as  the  trial  occurred  before 


§  79.]  CUTTER  V.  GILLETTE.  157 

the  expiration  of  the  contract  period,  it  was  impossible  for 
the  jury  to  ascertain  or  assess  the  damage  for  the  unexpired 
portion  of  the  contract  period  subsequent  to  the  time  of  trial. 
In  support  of  this  contention  the  defendant  cites  the  cases  of 
Colburn  v.  Woodworth,  31  Barb.  381 ;  Fowler  v.  Armour, 
24  Ala.  194  ;  Litchenstein  v.  Brooks,  75  Tex.  196,  12  S.  W. 
975  ;  and  Gordon  v.  Brewster,  7  Wis.  355,  — in  which  cases 
it  seems  to  have  been  held  that,  if  the  suit  is  begun  before 
the  expiration  of  the  contract  period,  damages  can  only  be 
allowed  to  the  time  of  the  trial.  He  asserts  that  in  the  case 
of  Howard  v.  Daly,  61  N.  Y.  362,  in  which  full  damages 
were  given,  the  writ  was  brought  after  the  expiration  of  the 
contract  period.  On  the  other  hand,  it  has  been  held  in 
Vermont  that,  if  there  has  been  such  a  breach  as  to  authorize 
the  plaintiff  to  treat  it  as  entirely  putting  an  end  to  the  con- 
tract, he  may  recover  damages  for  an  entire  non-fulfilment, 
and  is  not  limited  to  what  he  has  actually  sustained  at  the 
time  of  his  bringing  suit  or  the  time  of  trial.  Memelee  v. 
Hall,  31  Vt.  582.  And  in  Maine,  in  an  action  for  breach  of 
a  contract  for  hiring,  brought  before  the  expiration  of  the 
contract  period,  it  was  held  that  the  just  recompense  for  the 
actual  injury  sustained  b}r  the  illegal  discharge  was  the  stipu- 
lated wages,  less  whatever  sum  the  plaintiff  actually  earned, 
or  might  have  earned  by  the  use  of  reasonable  diligence. 
Sutherland  v.  Wyer,  67  Me.  64.  Such  would  seem  to  be 
the  rule  in  Pennsylvania.  See  King  v.  Steiren,  44  Pa.  St. 
99 ;  Chamberlin  v.  Morgan,  68  Pa.  St.  168.  And  the  de- 
fendant concedes  that  such  is  the  rule  in  England.  We  do 
not  go  into  an  exhaustive  consideration  of  the  decisions  upon 
the  question,  as  we  consider  it  to  have  been  settled  in  favor 
of  the  ruling  given  at  the  trial,  by  our  decisions.  Paige  v. 
Barrett,  151  Mass.  67,  23  N.  E.  725 ;  Blair  v.  Laflin,  127 
Mass.  518  ;  Dennis  v.  Maxfield,  10  Allen,  138  ;  Jewett  v. 
Brooks,  134  Mass.  505.  See  also  Parker  v.  Russell,  133 
Mass.  74 ;  Amos  v.  Oakley,  131  Mass.  413  ;  Warner  v.  Ba- 
con, 8  Gra}',  397,  408  ;  Drummond  v.  Crane,  159  Mass.  577, 
581,  35  N.  E.  90.     The  plaintiffs  cause  of  action  accrued 


158       OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VH. 

when  he  was  wrongfully  discharged.  His  suit  is  not  for 
wages,  but  for  damages  for  the  breach  of  his  contract  by  the 
defendant.  For  this  breach  he  can  have  but  one  action.  In 
estimating  his  damages  the  jury  have  the  right  to  consider 
the  wages  which  he  v{on\d  have  earned  nndfir  the  contract,, 
the  probability  whether  his  life  and  that  of  the  defendant 
would  continue  to  the  end  of  the  contract  period,  whether  the 
plaintiff's  working  ability  would  continue,  and  any  other  un- 
certainties growing  out  of  the  terms  of  contract,  as  well  as 
the  likelihood  thaj  the  plaintiff  would  be  able  to  earn  money 
in  other  work  during  the  time.  But  it  is  not  the  law  that 
damages,  which  may  be  larger  or  smaller  because  of  such 
uncertainties,  are  not  recoverable.  The  same  kind  of  diffi- 
culty is  encountered  in  the  assessment  of  damages  for  per- 
sonal injuries.  All  the  elements  which  bear  upon  the  matters 
involved  in  the  prognostication_are_to  be  considered  by  the 
jury,  and  from  the  evidence  in  each  case  they  are  to  form  an 
opinion  upon  which  all  can  agree,  and  to  which,  unless  it  is 
set  aside  by  the  court,  the  parties  must  submit.  The  liability 
to  have  the  damages  which  he  inflicts  by  breaking  his  con- 
tract so  assessed  is  one  which  the  defendant  must  be  taken 
to  have  understood  when  he  wrongfully  discharged  the  plain- 
tiff, and,  if  he  did  not  wish  to  be  subjected  to  it,  he  should 
have  kept  his  agreement.  Exceptions  overruled. 


§  79.]  SUTHERLAND  v.  WYER. 

67  Maine,  64.  — 1877. 

Assumpsit  to  recover  damages  for  breach  of  contract  of 
employment  for  thirty-six  weeks  at  $35  a  week,  from  Sep- 
tember 6,  1875.  Plaintiff  was  discharged  January  8,  1876, 
and  paid  in  full  to  that  date.  The  action  was  begun  January 
11,  1876.  Plaintiff  afterward  found  like  employment,  but  left 
it  voluntarily  before  the  expiration  of  the  thirty-six  weeks 


§  79.]  SUTHERLAND  V.   WYER.  159 

from  September  6th.  Verdict  for  plaintiff  for  full  amount  of 
salary  after  January  8th,  less  what  he  had  actually  earned  in 
other  employment.     Defendants  appeal. 

Virgin,  J.  (after  deciding  that  the  action  was  not 
prematurely  brought).  There  are  several  classes  of  cases 
founded  both  in  tort  and  in  contract,  wherein  the  plaintiff  is 
entitled  to  recover,  not  only  the  damages  actually  sustained 
when  the  action  was  commenced,  or  at  the  time  of  the  trial, 
but  also  whatever  the  evidence  proves  he  will  be  likely  to 
suffer  thereafter  from  the  same  cause.  Among  the  torts 
coming  within  this  rule,  are  personal  injuries  caused  by  the 
wrongful  acts  or  negligence  of  others.  The  injury  continu 
ing  beyond  the  time  of  trial,  the  future  as  well  as  the  past 
is  to  be  considered,  since  no  other  action  can  be  maintained. 
So  in  cases  of  contract,  the  performance  of  which  is  to  extend 
through  a  period  of  time  which  has  not  elapsed  when  the 
breach  is  made  and  the  action  brought  therefor  and  the  trial 
had.  Bemelee  v.  Hall,  31  Vt.  582.  Among  these  are 
actions  on  bonds  or  unsealed  contracts  stipulating  for  the 
support  of  persons  during  their  natural  life.  Sibley  v. 
Rider,  54  Me.  463 ;  Philbrook  v.  Burgess,  52  Me.  271. 

The  contract  in  controversy  falls  within  the  same  rule. 
Although,  as  practically  construed  by  the  parties,  the  salary 
was  payable  weekty,  still,  when  the  plaintiff  was  peremptorily 
discharged  from  all  further  service  during  the  remainder  of 
the  season,  such  discharge  conferred  upon  him  the  right  to 
treat  the  contract  as  entirely  at  an  end,  and  to  bring  his 
action  to  recover  damages  for  the  breach.  In  such  action 
he  is  entitled  to  a  just  recompense  for  the  actual  injury 
sustained  by  the  illegal  discharge.  Prima  facie,  such 
recompense  would  be  the  stipulated  wages  for  the  remain- 
ing eighteen  weeks.  This,  however,  would  not  necessarily 
be  the  sum  which  he  would  be  entitled  to ;  for  in  cases  of 
contract  as  well  as  of  tort,  it  is  generally  incumbent  upon  an 
injured  party  to  do  whatever  he  reasonably  can,  and  to 
improve  all  reasonable  and  proper  opportunities  to  lessen 
the  injury.      Miller  v.  Mariners'  Church,   7  Me.  51,  56 ; 


160      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VII. 

Jones  v.  Jones,  4  Md.  609,  2  Greenl.  Ev.  §  261,  and  notes ; 
Chamberlin  v.  Morgan,  68  Pa.  St.  168 ;  Sedg.  on  Dam. 
(6th  ed.)  416,  417,  cases  supra.  The  plaintiff  could  not  be 
justified  in  lying  idle  after  the  breach ;  but  he  was  bound  to 
use  ordinary  diligence  in  securing  employment  elsewhere, 
during  the  remainder  of  the  term ;  and  whatever  sum  he 
actually  earned  or  might  have  earned  by  the  use  of  reason- 
able diligence,  should  be  deducted  from  the  amount  of  the 
unpaid  stipulated  wages.  And  this  balance,  with  interest 
thereon,  should  be  the  amount  of  the  verdict.  Applying  the 
rule  mentioned,  the  verdict  will  be  found  too  large. 

By  the  plaintiff's  own  testimony,  he  received  only  $60 
from  all  sources  after  his  discharge,  —  $25  in  February,  and 
835  from  the  10th  to  the  20th  of  April,  at  Booth's.  His  last 
engagement  was  for  eight  weeks,  commencing  April  10th, 
which  he  abandoned  on  the  20th,  thus  voluntarily  omitting 
an  opportunity  to  earn  $57,  prior  to  the  expiration  of  his 
engagement  with  the  defendants,  when  the  law  required  him 
to  improve  such  an  opportunity,  if  reasonable  and  proper. 
We  think  he  should  have  continued  the  last  engagement 
until  May  6th,  instead  of  abandoning  it  and  urging  a  trial  in 
April,  especially  inasmuch  as  he  could  have  obtained  a  trial 
in  May,  just  as  well.  The  instructions  taken  together  were 
as  favorable  to  the  defendants  as  they  were  entitled  to. 

If,  therefore,  the  plaintiff  will  remit  $57,  he  may  have 
judgment  for  the  balance  of  the  verdict ;  otherwise  the  entry 
must  be  Verdict  set  aside  and  new  trial  granted. 


5.  Compensation  after  renunciation  of  agency. 

§  81.]  TIMBERLAKE  v.   THAYER. 

71  Mississippi,  279.  — 1893. 

Action  against  indorser  of  a  promissory  note.     Defence, 
payment  by  maker,  and  release  by  act  of  plaintiff  in  agreeing 


§  81.]  TEVEBERLAKE  V.  THAYER.  161 

with  the  maker  that  the  latter  should  perform  services  for 
the  former  in  payment  of  the  note.  The  court  charged  that 
if  the  maker  agreed  to  serve  plaintiff  for  a  year,  but  aban- 
doned the  contract  before  the  end  of  the  year,  he  could 
recover  nothing  for  the  services  performed.  The  court 
refused  to  charge  that  such  a  contract  would  release  defend- 
ant.    Judgment  for  plaintiff. 

Cooper,  J.  If  we  were  authorized  to  make  the  law, 
instead  of  announcing  it  as  it  is  already  made,  we  would 
unhesitatingly  hold  that  one  contracting  to  render  personal 
service  to  another  for  a  specified  time,  could,  upon  breach 
of  the  contract  by  himself,  recover  from  that  other  for  the 
value  of  the  service  rendered  by  him  and  received  by  that 
other,  subject  to  a  diminution  of  his  demand  to  the  extent  of 
the  damage  flowing  from  his  breach  of  contract.  In  Britton 
v.  Turner,  6  N.  H.  481,  Judge  Parker  demonstrates,  in  an 
admirable  and  powerful  opinion,  the  equity  of  such  a  rule ; 
and  it  was  held  in  that  case  that  such  was  the  rule  of  the 
common  law.  The  courts  of  some  of  the  States  have 
followed  or  been  influenced  by  that  opinion,  and  have 
overturned  or  mitigated  the  rigorous  rule  of  the  common 
law.  Pixler  v.  Nichols,  8  Iowa,  106  (74  Am.  Dec.  298)  ; 
Coe  v.  Smith,  A  Ind.  79  (58  Am.  Dec.  618)  ;  Biggs  v.  Horde, 
25  Tex.  Supp.  456  (78  Am.  Dec.  584)  ;  Chamblee  v.  Baker, 
95  N.  C.  98 ;  Parcell  v.  McComber,  11  Neb.  209.  But  the 
decided  weight  of  authority  is  to  the  contrary.  Lawson  on 
Contracts,  §  470,  n.  4,  and  authorities  there  cited.  And  it 
was  decided  at  an  earl}7  day  in  this  State  that  an  entire 
contract  of  this  character  could  not  be  apportioned,  and 
that  under  the  circumstances  named  no  recovery  could  be 
had  by  the  party  guilty  of  the  breach  of  contract ;  that 
he  could  not  recover  on  the  special  contract  because  he 
himself  had  not  performed,  nor  upon  quantum  meruit  be- 
cause of  the  existence  of  the  special  contract.  Wooten  v. 
Bead,  2  Smed.  &  M.  585.  In  Hariston  v.  Sale,  6  Smed.  & 
M.  634,  and  Bobinson  v.  Sanders,  24  Miss.  391,  it  was 
held  that  an  overseer's  contract  with  his  employer,  though 

11 


162      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VIL 

made  for  a  definite  time,  was  not  an  entire  contract,  and 
recoveries  were  allowed  on  the  common  counts. 

The  cases  relied  on  to  support  the  rule  announced  in  these 
decisions  were  Byrd  v.  Boyd,  2  McCord  (So.  Car.),  246  ; 
Edken  v.  Harrison,  Id.  249;  McClure  v.  Pyatt,  Id.  26. 
Of  these,  the  leading  case  is  Byrd  v.  Boyd ;  the  others 
simply  follow  it.  In  Byrd  v.  Boyd,  the  court  evidently 
legislates  the  exception  into  the  law,  and  so,  in  effect, 
declared,  for,  after  referring  to  the  rule  of  the  common  law, 
the  court  proceeds  to  say:  "There  is,  however,  a  third 
class  of  cases  for  which  it  is  necessary  to  provide,"  and 
then  declares  that  these  cases  for  which  it  is  necessary  for 
the  court  "to  provide"  are  "those  where  the  emploj'er 
reaps  the  full  benefit  of  the  services  which  have  been 
rendered,  but  some  circumstance  occurs  which  renders  his 
discharging  the  overseer  necessary  and  justifiable,  and  that, 
perhaps,  not  immediately  connected  with  the  contract,  as  in 
the  present  case." 

The  South  Carolina  couvt  put  its  decision  expressly  upon 
the  ground  of  expediency,  and  confined  its  effect,  by  neces- 
sary implication,  to  the  particular  sort  of  contract  under 
consideration.  Since  the  abolition  of  slavery  we  have  no 
such  contracts,  stride,  as  those  which  formerly  existed  be- 
tween employer  and  overseer,  and  the  decisions  in  Wooten 
v.  Bead,  and  Hariston  v.  Sale  have  no  field  of  operation. 
The  instructions  for  the  plaintiff  were  properly  given. 

(The  court  then  decides  that  the  trial  judge  erred  in 
refusing  the  instruction  as  to  the  effect  of  such  a  contract  in 
working  a  release  of  the  surety,  and  on  this  ground  reversed 
the  judgment) 


§  81.]  DAVIS  V.  MAXWELL.  163 


§81]  DAVIS  v.   MAXWELL. 

12  Metcalf  (Mass.)  286.  —  1847. 

Assumpsit  to  recover  for  three  months  and  one  day's 
service  at  twelve  dollars  a  month.  Defence,  an  entire  con- 
tract for  seven  months  and  breach  by  plaintiff.  Judgment 
for  defendant. 

Hubbard,  J.  ...  In  regard  to  the  contract  itself,  which 
was  an  agreement  to  work  for  the  defendant  seven  months, 
at  twelve  dollars  per  month,  we  are  of  opinion  that  it  was 
an  entire  one,  and  that  the  plaintiff,  having  left  the  defend- 
ant's service  before  the  time  expired,  cannot  recover  for  the 
partial  service  performed  ;  and  that  it  differs  not  in  principle 
from  the  adjudged  cases  of  Stark  v.  Parker,  2  Pick.  267 ; 
Olmstead  v.  Beale,  19  Pick.  528 ;  and  Thayer  v.  Wads- 
worth,  19  Pick.  349;  which  we  are  unwilling  to  disturb, 
upon  mere  verbal  differences  between  the  contracts  in  those 
cases  and  in  this,  which  do  not  affect  its  spirit. 

The  plaintiff  has  argued  that  it  was  a  contract  for  seven 
months,  at  twelve  dollars  per  month,  to  be  paid  at  the  end  of 
each  month.  But  however  reasonable  such  a  contract  might 
be,  it  is  not,  we  think,  the  contract  which  is  proved.  There 
is  no  time  fixed  for  the  payment,  and  the  law  therefore  fixes 
the  time  ;  and  that  is,  in  a  case  like  this,  the  period  when  the 
service  is  performed.  It  is  one  bargain  ;  performance  on  one 
part  and  payment  on  the  other;  and  not  part  performance 
and  full  payment  for  the  part  performed.  The  rate  per  month 
is  stated,  as  is  common  in  such  contracts,  as  fixing  the  rate 
of  payment,  in  case  the  contract  should  be  given  up  by  con- 
sent, or  death  or  other  casualty  should  determine  it  before  its 
expiration,  without  affecting  the  right  of  the  party.  Such 
contracts  for  hire,  for  definite  periods  of  time,  are  reasonable 
and  convenient,  are  founded  in  practical  wisdom,  and  have 
long  received  the  sanction  of  the  law.  It  is  our  duty  to  sus- 
tain them,  when  clearly  proved. 

The  rulings  and  directions  of  the  learned  judge,  we  think, 
were  correct,  and  the  exceptions  are  overruled. 


164       OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.       [CH.  VTL 


6.     Compensation  where  agent  acts  for  both  parties. 

§  82.]  CANNELL  v.  SMITH. 

142  Pennsylvania  State,  25.  — 1891. 

Action  to  recover  back  $5,000  paid  b}'  plaintiff  to  defendant 
as  a  commission  for  effecting  a  sale  of  real  estate.  Judgment 
for  plaintiff.     Defendant  appeals. 

Defendant  was  employed  by  one  Massey,  who  represented 
a  prospective  purchaser  of  plaintiff's  property,  to  interview 
plaintiff  as  to  the  terms  on  which  she  would  sell,  Massey 
agreeing  to  pay  defendant  a  commission.  Defendant  repre- 
sented to  plaintiff  that  he  would  act  for  her  upon  her  agree- 
ment to  pay  hitn  one-half  of  all  the  property  sold  for  over  and 
above  $80,000.  Defendant  negotiated  a  sale  to  Massey's  prin- 
cipal for  $92,000,  and  accepted  $5,000  as  his  commission. 
Massey's  principal  demanded  that  defendant  should  account 
to  her  for  the  commission  received  from  plaintiff,  on  the 
ground  that  defendant  was  her  agent.  Defendant  thereupon 
compromised  by  paying  $2,600  of  his  commission  to  Massey's 
principal. 

The  court  excluded  the  testimony  of  one  Shallcross  offered 
to  prove  that  plaintiff's  property  sold  for  from  $10,000  to 
$15,000  more  than  it  was  worth,  and  charged  the  jury  that  it 
was  immaterial  whether  plaintiff  lost  anything  by  the  fact 
that  defendant  represented  both  parties,  and  that  if  defend- 
ant represented  both  sides  without  the  knowledge  of  plaintiff. 
she  could  recover  back  the  money  paid  to  him. 

Per  Curiam.  The  defendant  was  a  real-estate  broker  and 
attempted  to  serve  two  masters.  There  is  high  authority  for 
saying  that  this  cannot  be  done.  Matt  yi.  24.  The  plaintiff 
paid  him  a  commission  of  $5,000  for  effecting  a  sale  of  cer- 
tain real  estate,  in  ignorance  of  the  fact  that  he  was  also 
the  broker  or  agent  of  the  purchaser.  When  she  discov- 
ered that  he  was  acting  in  this  dual  character,  she  brought 
this  suit  in  the  court  below  to  recover  back  the  money  so 


§  82.]  CANNELL  V.   SMITH.  165 

paid,  and  succeeded.  We  have  no  doubt  of  the  right  to 
recover  money  paid  under  such  circumstances.  It  is  against 
public  policy  and  sound  morality  for  a  man  to  act  as  broker 
for  both  parties,  unless  that  fact  is  fully  communicated  to 
them.  The  right  to  recover  being  established,  this  judgment 
must  stand  unless  some  error  was  committed  on  the  trial 
below  by  which  the  defendant  was  prejudiced. 

A  careful  examination  of  the  record  fails  to  disclose  any 
such  error.  The  court  was  not  asked  to  direct  a  verdict  in 
favor  of  the  defendant,  and  could  not  properly  have  done  so 
in  view  of  the  evidence.  This  disposes  of  the  first  assign- 
ment. The  second  is  without  merit.  The  payment  of  the 
$2, 600  to  the  Drexels  was  a  fact  in  the  case.  The  defendant's 
belief  as  to  his  moral  or  legal  liability  to  pay  this  money  was 
not  important ;  nor  was  it  material  that  he  had  never  made 
any  admissions  ' '  to  the  Masseys,  or  an)'  one  else,"  upon  this 
subject.     The  testimony  of  the  witness  Shallcross  was  properly 

rejected.      Tljfl  plaintiff's  right,  to  rpnnvpr  did  not  ripppnH  nppn 

the  character  of  the  sale,  whether  advantageous  or  otherwise ; 
it  rested  upon  the  higher  ground  of  public  policy :  Everhart  v. 
Searle,  71  Pa.  256.  The  instructions  complained  of  in  the 
fourth  and  fifth  assignments  are  free  from  error.  The  learned 
judge  fairly  submitted  to  the  jury  the  question  of  plaintiff's 
knowledge  of  the  defendant's  dual  character.  There  was 
abundant  evidence  of  her  ignorance  upon  this  point  to  go  to 
the  jury.  She  testified  distinctly  that  the  defendant  told  her 
that  he  was  acting  for  her,  and  for  her  alone.  The  defendant 
did  not  deny  that  he  had  been  employed  by  the  purchasers. 
His  contention  was  that  he  had  ceased  to  act  for  them  before 
he  entered  the  service  of  the  plaintiff.  This  was  a  question 
of  fact  for  the  jury,  and  unfortunately  for  the  defendant  they 
did  not  take  his  view  of  it 

Judgment  affirmed 


166       OBLIGATIONS  OF  PBINCIPAL  TO  AGENT.      [CH.  VH. 

§82.]  SHORT  v.  MILLARD.   f7'< 

68  Illinois,  292.  — 1873. 

This  was  an  action  brought  by  Mortimer  Millard  against 
John  Short,  to  recover  for  services  as  agent,  in  the  city 
court  of  East  St.  Louis.  The  plaintiff  recovered  judgment, 
and  the  defendant  appealed  to  the  circuit  court,  where  the 
plaintiff  again  recovered  judgment  for  $500  and  costs.  From 
this  judgment  the  defendant  appealed  to  this  court. 

Mr.  Justice  Walker  delivered  the  opinion  of  the  court. 

Appellee  sued  appellant  to  recover  for  services  as  agent  in 
selling  a  tract  of  land.  It  appears  that  appellant  agreed  that 
if  appellee  would  find  him  a  purchaser  for  a  piece  of  land,  he 
would  pay  him  $500.  The  evidence  shows  that  he  procured 
a  purchaser  at  the  price  fixed  by  appellant,  and  the  sale  was 
consummated.  But  it  is  urged  that  appellee  was  acting  as 
the  agent  of  both  appellant  and  Lovingston,  the  purchaser, 
without  having  notified  appellant.  An  examination  of  the 
evidence  shows  that  the.  defence  is  not  established.  The 
only  evidence  we  find  in  support  of  the  defence  is  what  was 
said  by  Lovingston  when  the  sale  was  closed.  He  at  that  time 
proposed  that  appellee  should  prepare  the  deed,  as  he  was 
acting  for  both  parties ;  but  the  proposition  was  declined, 
appellant  at  the  time  saying  another  attorney  did  his  busi- 
ness ;  and  it  appears  that  appellee  was  present  when  the 
papers  were  executed.  He  was  there  at  the  instance  of 
Lovingston. 

There  is  no  doubt  that  appellee  was  the  agent  of  appellant 
in  procuring  a  purchaser,  and  the  evidence  shows  that  he 
obtained  one  at  the  full  price  fixed  by  appellant ;  and  when 
iie  had  fully  performed  the  agency,  and  it  was  at  an  end,  he 
thei|  received  a  retainer  from  the  purchaser  to  see  that  the 
papers  were  properly  prepared  and  executed.  In  this  we 
perceive  nothing  wrong  or  inconsistent.  It  is  true,  his 
retainer  by  Lovingston  grew  out  of  his  former  agency,  but 
not  till  after  that  relation  had  terminated.     When  he  found 


§  82.]  MONTROSS   V.   EDDY.  167 

the  purchaser  he  was  no  longer  the  agent  of  appellant,  and 
was  free  to  take  the  retainer  from  Lovingston.  There  was, 
then,  nothing  improper  or  inconsistent  in  his  thus  acting. 
The  evidence  sustains  the  finding  of  the  jury. 

No  question  has  been  raised  as  to  the  jurisdiction  of  the 
city  court  to  try  the  case,  and  the  judgment  of  the  court 
below  is  affirmed.  Judgment  affirmed. 


§  82.]  MONTROSS  v.  EDDT  et  al. 

94  Michigan,  100.  — 1892. 

Action  to  recover  for  services  rendered  defendants  in 
negotiating  a  sale  of  their  lands.  Judgment  for  plaintiff. 
Defendants  appeal. 

Defendants  promised  plaintiff  that,  if  he  found  a  purchaser 
for  the  lands  at  $90,000  they  would  pay  him  for  his  services. 
Plaintiff  at  that  time  was  representing  a  prospective  pur- 
chaser, to  whom  subsequently  he  introduced  defendants,  and 
who  purchaged  the  lands  of  defendants  at  890,000.  The 
purchaser  paid  plaintiff  $500  as  compensation.  Defendants 
paid  plaintiff  $250,  and  he  brought  this  action  for  additional 
compensation,  and  recovered  a  verdict  for  $250. 

Durand,  J.  .  .  .  As  to  whether  the  payment  by  Pitts  & 
Cranage  to  the  plaintiff  of  $500  was  a  present,  or  was  paid 
under  an  agreement  made  by  them  for  his  services,  we  deem 
it  immaterial.  If  the  defendants  are  liable  at  all,  it  is  upon 
their  agreement  to  pa}'  the  plaintiff  for  his  services  if  he  made 
a  sale  of  this  land  at  $90,000.  Nothing  was  left  to  his  dis- 
cretion. He  had  nothing  to  do  with  the  price.  He  had 
simply  to  find  a  purchaser  willing  to  give  the  price  asked  ; 
and  it  can  be  of  no  importance  whatever  to  the  defendants 
whether  or  not  those  purchasers  also  paid  the  plaintiff  for 
any  services  he  may  have  rendered  them.  As  was  said  in 
Hanney  v.  Donovan,  78  Mich.  318 :  — 

11  A_hroVer  who  simply  brings  the  parties  together,  and  has 
no  hand  in  the  negotiations  between  them,  they  making  their 


168      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VTL 

own  bargain  without  bis  aid  or  interfe rence,  can  legally 
rpopjyp  pnmppnRflt.inn  from  both  of  them,  although  each  was 
ignorant  of  his  employment  by  the  other." 

All  that  the  plaintiff  was  to  do  was  to  find  a  purchaser  at  a 
certain  sum  fixed  and  agreed  upon.  Neither  his  efforts  nor 
judgment  were  to  be  employed  to  get  a  greater  price.  When 
he  did  this,  and  the  sale  brought  about  b}-  him  as  middle- 
man was  consummated,  he  was  entitled  to  a  reasonable  com- 
pensation for  his  services,  if  the  jury  believed  his  version  of 
what  the  contract  was,  as  they  evidently  did  do.  If  the 
plaintiff  made  any  misstatements  to  Pitts  &  Cranage  in  ref- 
erence to  the  amount  of  pine  on  the  land,  or  to  its  qualitj', 
and  thereby  induced  them  to  pa}-  the  sum  asked  for  it  bj'  the 
defendants,  certainly  the  defendants  cannot  complain ;  nor 
can  they  be  heard  to  sa}-  that,  because  Pitts  &  Cranage  paid 
or  gave  plaintiff  $500  for  services  performed  b}'  him  in  bring- 
ing about  the  purchase,  therefore  they  are  relieved  from  pay- 
ing  him,  if  the}'  agreed  to  do  so.  He  was  simply  acting  as  a 
go-between  to  bring  the  buyers  and  sellers  together,  to  make 
their  own  bargain.  This  is  all  he  did  do ;  and  either  or  both 
parties  in  such  a  case  would  be  legally  bound  to  pay  such 
sum  as  was  agreed  upon  for  the  services  rendered. 

We  do  not  find  any  prejudicial  error  in  the  case. 

The  judgment  will  be  affirmed,  with  costs  of  this  court  to 
the  plaintiff. 

The  other  justices  concurred. 


§  82.]    TERRY  v.  BIRMINGHAM  NATIONAL 

BANK.1 

99  Alabama,  566.  — 1892. 

Action  of  assumpsit  by  the  bank  to  recover  against  Terry 
upon  a  promissory  note.  Plea  of  set-off.  Judgment  for 
plaintiff.     Defendant  appeals. 

*  For  former  appeal  see  93  Ala.  599. 


§  82.]      TERRY  V.   BIRMINGHAM  NATIONAL  BANK.      169 

The  note  in  question  was  secured  by  certain  stocks  de- 
posited with  the  bank  as  collateral  security.  Defendant 
gave  the  president  of  the  bank  a  power  of  attorney  to  sell  the 
stock  on  the  Stock  Exchange.  The  president  employed  one 
Lightfoot  to  sell  it.  Lightfoot  was  also  employed  by  one 
Rucker  to  buy  similar  stock.  Lightfoot  procured  one  Brad- 
field,  also  a  member  of  the  exchange,  to  bid  for  Rucker. 
Lightfoot  offered  the  stock  on  the  exchange,  and  it  was  bid 
in  by  Bradfield  for  Lightfoofs  principal,  Rucker.  The 
amount  was  credited  on  the  note,  and  this  action  is  for  the 
balance  due  over  and  above  this  credit  and  other  credits. 
The  defendant  seeks  to  set  off  the  value  of  the  stock  above 
what  it  brought  on  this  sale. 

Coleman,  J.  .  .  .  The  principle  of  law  that  the  same 
person  cannot  be  both  buyer  and  seller  has  no  application 
to  the  facts  of  the  case.  R.  D.  Johnston  employed  Lightfoot, 
a  member  of  the  Stock  Exchange,  to  sell  this  stock.  One 
E.  W.  Rucker,  the  purchaser,  employed  Lightfoot  to  pur- 
chase on  the  exchange,  at  a  limited  price,  stock  of  the  char- 
acter offered  by  Johnston.  Johnston  knew  nothing  of 
Rucker's  engagement  or  intentions.  In  accordance  with  the 
rules  of  the  exchange,  Lightfoot  secured  the  services  of 
Bradfield,  another  member  of  the  exchange,  to  bid  the  price 
fixed  by  Rucker.  Lightfoot  knew  the  instructions  of  both 
Johnston  and  Rucker,  but  neither  Johnston  nor  Rucker  had 
any  knowledge  of  each  other's  intentions,  or  their  instruc- 
tions to  Lightfoot.  And,  as  we  have  stated,  there  is  no 
evidence  to  show  that  the  rules  of  the  Stock  Exchange, 
which  were  known  to  Terry,  were  not  observed,  or  that  the 
stock  did  not  bring  its  fair  market  value,  which  was  credited 
upon  the  note  of  the  defendant. 

Under  any  view  we  take  of  the  case,  the  plaintiff  was 
entitled  to  the  general  charge  upon  all  the  evidence,  and  it 
is  unnecessary  to  consider  special  exceptions  to  the  rulings 
of  the  court. 

Affirmed. 


170      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VLL 


7.  Reimbursement  and  indemnity. 

§§  84,  85.]  MOORE  v.   APPLETON. 

26  Alabama,  633.  —  1855. 

Trespass  on  the  case  to  recover  indemnity  for  damages 
paid  b}T  plaintiff  as  a  result  of  a  suit  against  him  by  one 
Quinb}-  for  acts  done  by  plaintiff  as  defendant's  agent 
Demurrer  to  complaint  overruled.  Verdict  and  judgment 
for  plaintiff.     Defendant  appeals. 

Plaintiff  by  direction  of  defendant  took  goods  out  of  the 
possession  of  Quinbj-,  which  defendant  claimed  were  his. 
Quinby  brought  an  action  of  trespass  against  plaintiff  and 
had  judgment,  which  was  paid. 

Rice,  J.  Every  man  who  employs  another  to  do  an  act 
which  the  employer  appears  to  have  a  right  to  authorize  him 
to  do,  undertakes  to  indemnify  him  for  all  such  acts  as  the 
agent  does  not  know  to  be  unlawful,  and  as  would  be  lawful 
if  the  employer  bad  the  authority  he  pretends  to  have. 
Adamson  v.  Jarvis,  4  Bing.  66 ;  Story  on  Agency,  §  339. 

Where  two  persons  are  claiming  title  to  personal  property 
adversely  to  each  other,  and  one  of  these  claimants  calls 
upon  another  person  to  take  it,  and  the  latter  has  reasonable 
ground  to  believe  that  his  emploj-er  is  the  owner  of  the 
property,  and  therefore  takes  it,  without  knowing  at  the  time 
that  such  taking  is  a  trespass  or  tort,  a  promise  of  indemnity 
will  be  implied  to  such  person,  although  it  subsequently 
turns  out  that  the  title  of  the  employer  was  not  good,  and 
the  act  of  taking  a  trespass.  Avery  v.  Halsey,  14  Pick. 
174. 

In  all  such  cases,  a  promise  of  indemnity  is  implied,  upqp 
the  plain  dictates  of  reason  and  natural  justice.  Gower  v. 
Emery,  1 8  Maine  R.  79  ;  Parsons  on  Cont.  36,  n.  x. 

The  promise  thus  implied  extends  only  to  such  losses  and 
damages  as  are  direct  and  immediate,  and  naturally  flow 
from  the  execution  of  the  agency.    In  other  words,  the 


§§  84,  85.]  MOOKE  V.  APPLETON.  171 

agency  must  be  the  cause,  and^not  merely  the  occasion  of 
the  losses  or  damages,  to  found  a  just  right  to  reimburse- 
ment. Story  on  Agency,  §  341 ;  Story  on  Contracts, 
§  176. 

Assumpsit  lies  upon  such  implied  promises.  An  action  on 
the  case  is  equally  maintainable,  and  it  is  said  to  be  the  more 
appropriate  remedy.  Myers  v.  Gilbert,  18  Ala.  467  ;  Adam- 
son  v.  Jarvis,  and  other  cases  cited  supra.  But  whether  the 
action  be  assumpsit  or  case,  the  declaration  is  bad,  on  de- 
murrer, if  no  breach  is  stated  in  it.     1  Chitty's  PL  337. 

When  the  declaration  is  in  case,  as  it  is  here,  and  shows 
that  the  losses  for  which  the  agent  is  seeking  indemnity  from 
the  principal,  are  certain  damages  recovered  against  the 
agent  for  taking  property  by  the  direction  of  the  principal, 
in  an  action  of  trespass  brought  against  the  agent  by  the 
true  owner  of  the  propert}*,  the  declaration  is  defective,  if 
it  omits  to  state  that  the  taking  by  the  agent  was  without 
knowledge  on  his  part,  at  the  time  of  the  taking,  that  it  was 
a  trespass.  The  agent  must,  in  his  declaration,  negative 
the  existence  of  such  knowledge  on  his  part,  although  the 
onus  of  proving  the  existence  of  such  knowledge  may  be  on 
the  principal ;  for  the  rule,  that  the  allegata  and  probata 
must  correspond,  is  not  of  universal  application.  Car- 
penter v.  Devon,  6  Ala.  718. 

Each  count  of  this  declaration  is  bad,  for  the  omission  of 
a  breach,  and  also  for  failing  to  aver  that  the  agent,  at_the 
time  of  the  taking,  did  notT  know  that  it  was  a_jrespass  or 
tort 

An  averment  that  the  principal  had  notice  of  the  losses 
and  damages  sustained  by  the  agent  set  forth  in  the  declara- 
tion, and  failed  to  pay  the  same,  would  be  a  good  breach  in 
such  a  case  as  this. 

We  admit  the  rule,  that  the  law  will  not  enforce  contribu- 
tion nor  indemnity  between  wrong-doers.  But  that  rule  does 
not  apply  to  any  case  where  the  act  of  the  agent  was  not 
manifestly  illegal  in  itself,  and  was  done  bona  fide  in  the 
execution  of  his  agency,  and  without  knowledge  (either  actual, 


172       OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VH. 

or  implied  by  law)  that  it  was  illegal.  Parsons  on  Cont. 
p.  36,  note  x. 

That  rule  is  applicable,  whenever  it  appears  that  the  act  of 
the  agent  was  manifestly  illegal  in  itself.  For  example,  if  A. 
emplojs  B.  to  assault  C,  and  B.  thereupon  does  assault  C, 
and  is  subjected  to  damages  therefor,  B.  cannot  recover  such 
damages  from  A. :  the  act  of  B.  being  clearly  illegal  in  itself, 
the  law  implies  that  he  knew  it  to  be  so,  and  therefore  will 
not  enforce  his  claim  to  indemnity. 

The  rule  also  applies,  whenever  it  appears  that,  although 
the  act  of  the  agent  was  not  manifestly  illegal  in  itself,  yet, 
in  fact,  he  knew  it  to  be  unlawful  at  the  time  he  did  it.  For 
example,  if  Appleton,  at  the  time  he  took  the  property  claimed 
by  Moore,  knew  that  Moore  had  no  just  nor  lawful  right  to 
it,  and  that  Moore's  claim  was  groundless  and  iniquitous,  and 
that  it  really  belonged  to  some  other  person,  such  knowledge 
on  the  part  of  Appleton  at  the  time  of  the  taking  would 
defeat  any  recovery  bj'  him  for  any  loss  resulting  from  such 
taking,  although  he  took  it  as  the  agent  of  Moore,  and  by 
Moore's  direction.  Chappell  v.  Wysham,  4  Harris  & 
Johns.  560. 

For  the  error  of  the  court  below  in  overruling  the  de- 
murrers to  the  several  counts  of  the  declaration,  its  judgment 
is  reversed,  and  the  cause  remanded. 


§  §  84,  85.]  D'ARCY   w.    LYT/R. 

5  Binney  (Pa.),  441.  —  1813. 

Action  of  indebitatus  assumpsit  for  money  paid  out  and  ex- 
pended, and  services  rendered.  Verdict  for  plaintiff.  Motion 
for  new  trial. 

D'Arcy  in  1804  received  from  Lyle  a  power  of  attorney  to 
settle  the  latter's  accounts  with  Suckley  &  Co.  in  Hayti.  On 
his  way  to  Hayti  he  was  chased  by  a  French  privateer  and 


§§  84,  85.]  d'arcy  v.  lyle.  173 

threw  overboard,  among  other  papers,  this  power  of  attorney. 
Suckle}*  &  Co.  consented  to  deliver  Lyle's  goods  to  D'Arcy 
if  the  latter  would  pay  a  balance  due  them  from  Lyle.  This 
was  agreed  to,  but  before  the  goods  were  completely  deliv- 
ered they  were  attached  by  one  Richardson  for  debts  due  his 
principals  from  Suckley  &  Co.  The  courts  awarded  the  goods 
to  D'Arcy  for  Lyle  conditioned  upon  his  giving  a  bond  to 
procure  an  authentic  power  of  attorney,  or  pay  to  Richardson 
the  invoice  value  of  the  goods.  The  power  of  attorney  was 
afterward  received  and  duly  noted,  and  the  bond  satisfied. 
D'Arc}'  sold  the  goods  and  rendered  an  account  to  L}*le. 

Three  }*ears  later,  upon  a  change  in  the  government  of 
Hayti,  Richardson  brought  suit  against  D'Arcy  to  recover 
the  value  of  these  goods.  The  courts  decided  for  D'Arcy  on 
the  ground  that  his  bond  had  been  satisfied  ;  but  the  presi- 
dent, Christophe,  issued  an  arbitrary  order  that  D'Arcy  and 
Richardson  should  fight  each  other,  and  that  the  victor  should 
have  judgment  in  the  suit.  D'Arcy  protested,  but  finally 
consented  to  the  wager  of  battle.  The  result  was  uncertain, 
and  Christophe  issued  an  order  that  they  should  fight  again. 
D'Arcy  sought  to  flee  the  country,  but  was  intercepted. 
After  an  interview  with  the  president,  he  consented  to  pay 
Richardson  the  $3,000  claimed,  and  the  judgment  of  the 
court  was  entered  to  that  effect.  D'Arcy  paid  the  $3,000, 
and  brings  this  action   to  recover  it  from   Lyle. 

Tilghman,  C.  J.  This  is  one  of  those  extraordinary  cases 
arising  out  of  the  extraordinary  situation  into  which  the 
world  has  been  thrown  by  the  French  revolution. 

If  the  confession  of  judgment  by  the  plaintiff  had  been 
voluntary,  it  would  have  lain  on  him  to  show  that  the 
$3,000  were  justly  due  from  the  defendant  to  Richardson, 
or  the  persons  for  whom  he  acted,  or  that  the}'  had  a  lien 
on  the  goods  of  the  defendant  to  that  amount.  But  the 
confession  of  judgment  was  be}*ond  all  doubt  extorted  from 
the  plaintiff  by  duress,  and  he  did  not  yield  to  fears  of  which 
a  man  of  reasonable  firmness  need  be  ashamed.  The  ma- 
terial fact  on  which  this  case  turns  is,  whether  the  trans- 


174      OBLIGATIONS  OF  PKINCIPAL  TO  AGENT.      ['CH.  VII. 

actions  between  the  plaintiff  and  Richardson  were  on  any 
private  account  of  the  plaintiff,  or  solely  on  account  of 
the  defendant  That  was  submitted  to  the  jury,  and  we 
must  now  take  for  granted  that  the  proceedings  at  the  Cape 
against  the  plaintiff  were  in  consequence  of  his  having  re- 
ceived possession  of  the  defendant's  goods  from  Suckley  & 
Co.  I  take  the  law  to  be  as  laid  down  by  Heineccius,  Turn- 
bull's  Heinec.  c.  13,  pp.  269,  270,  and  by  Erskine  in  his 
Institutes,  2  Ersk.  Inst.  534,  that  damages  incurred  by  the 
agent  in  the  course  of  the  management  of  the  principal's 
affairs,  or  in  consequence  of  such  management,  are  to  be 
borne  by  the  principal.  It  is  objected  that  at  the  time  when 
judgment  was  rendered  against  the  plaintiff,  he  was  no  longer 
an  agent,  having  long  before  made  up  his  accounts,  and 
transmitted  the  balance  to  the  defendant.  But  this  objection 
has  no  weight  if  the  judgment  was  but  the  consummation  of 
the  proceedings  which  were  commenced  during  the  agency. 
As  such  I  view  them,  and  I  make  no  doubt  but  they  were  so 
considered  by  the  jur}7.  It  is  objected  again,  that  no  man  is 
safe  if  he  is  to  be  responsible  to  an  unknown  amount,  for  any 
sums  which  his  agent  may  consent  to  pay,  in  consequence  of 
threats  of  unprincipled  tyrants  in  foreign  countries.  Ex- 
treme cases  ma\*  be  supposed,  which  it  will  be  time  enough 
to  decide  when  they  occur.  I  beg  it  to  be  understood,  that 
I  give  no  opinion  on  a  case  where  an  agent  should  consent 
to  pay  a  sum  far  exceeding  the  amount  of  the  property  in  his 
hands.  That  is  not  the  present  case,  for  the  property  of  the 
defendant,  in  the  hands  of  the  plaintiff  in  1804,  was  esti- 
mated at  $3,000.  The  cases  cited  b}-  the  defendant  show, 
that  if  the  agent,  on  a  journey  on  business  of  his  prin- 
cipal, is  robbed  of  his  own  money,  the  principal  is  not  an- 
swerable. I  agree  to  it,  because  the  canying  of  his  own 
money  was  not  necessarily  connected  with  the  business  of 
his  principal.  So  if  he  receives  a  wound,  the  principal  is 
not  bound  to  pay  the  expenses  of  his  cure,  because  it  is  a 
personal  risk  which  the  agent  takes  upon  himself.  One  of 
the  defendant's  cases  was,  that  where  the  agent's  horse  was 


§§  84,  85.]  d'akcy  v.  lyle.  175 

taken  lame,  the  principal  was  not  answerable.  That  I  think 
would  depend  upon  the  agreement  of  the  parties.  If  A. 
undertakes  for  a  certain  sum  to  carry  a  letter  for  B.  to  a 
certain  place,  A.  must  find  his  own  horse,  and  B.  is  not 
answerable  for  any  injury  which  may  befall  the  horse  in  the 
course  of  the  journey.  But  if  B.  is  to  find  the  horse,  he  is 
responsible  for  the  damage.  In  the  case  before  us,  the 
plaintiff  has  suffered  damage  without  his  own  fanltT  on  ac- 
count of  his  agency,  and  the  jury  have  indemnified  him  to 
an  amount  very  little,  if  at  all,  exceeding  the  property  in  his 
hands,  with  interest  and  costs.  I  am  of  opinion  that  the 
verdict  should  not  be  set  aside. 

Yeates,  J.  ...  I  see  no  reason  whatever  for  retracting 
the  opinion  I  had  formed  on  the  trial,  that  where  a  factor 
has  acted  faithfully  and  prudently  within  the  scope  of  his 
authority,  he  is  entitled  to  protection  from  his  constituent, 
and  compensation  for  compulsory  payments  exacted  against 
him  under  the  form  of  law,  for  the  transactions  of  hisjtgency. 
The  flagitious  conduct  of  Christophe,  President  of  Hayti, 
compelled  the  litigant  parties  under  his  savage  power  into  a 
trial  by  battle,  in  order  to  decide  their  civil  rights.  He 
influenced  the  civil  tribunal  of  the  first  district  of  the  prov- 
ince of  the  North,  sitting  at  the  Cape,  "  to  set  aside  a  former 
judgment  rendered  by  the  tribunal  of  commerce,  and  of 
their  own  court,  and  to  condemn  D'Arcy,"  according  to  the 
language  of  the  sentence,  "  to  pay  to  Thomas  Richardson 
$3,000,  for  so  much  he  had  engaged  to  him  to  pa}r  for 
Suckley  &  Co.  for  merchandise,  which  the  latter  had  de- 
livered to  him  as  belonging  to  James  Lyle,  whom  the  said 
D'Arcy  represented,  for  which  the  tribunal  do  reserve  to 
D'Arcy  his  rights,  that  he  may  prosecute  the  same,  if  he 
thinks  proper,  against  the  said  Lyle  or  Suckley,"  etc. 

The  defendant  appointed  the  plaintiff  his  attorney,  to  settle 
and  collect  a  debt  in  a  barbarous  foreign  countay.  The 
plaintiff  has  transacted  that  business  with  fidelity  and  care, 
and  remitted  the  proceeds  to  his  principal.  He  risked  his 
life  in  defence  of  the  interests  of  his  constituent,  under  the 


176      OBLIGATIONS  OF  PRINCIPAL  TO  AGENT.      [CH.  VH. 

imperious  mandate  of  a  capricious  tyrant,  holding  the  reins 
of  government  He  has  since  been  compelled,  by  a  mockery 
of  justice,  to  pay  his  own  moneys  for  acts  lawfully  done  in 
the  faithful  discharge  of  his  duties  as  an  agent ;  and  I  have 
no  difficulty  in  saying,  that  of  two  innocent  persons,  the 
principal,  and  not  the  agent,  should  sustain  the  loss. 

In  Leate  v.  Turkey  Company  Merchants,  Toth.  105,  it 
was  decreed,  that  if  a  consul  bej'ond  sea  hath  power,  and 
do  levy  goods  upon  a  private  merchant,  the  company  must 
bear  the  loss,  if  the  factor  could  not  prevent  the  act  of  the 
consul.  The  decree  is  founded  in  the  highest  justice,  and 
its  reason  peculiarly  applies  to  the  present  case.  D'Arcy 
was  doomed  by  the  cruel  order  of  an  inexorable  tyrant,  either 
to  pay  the  $3,000,  or  in  his  hated  presence  to  fight  his  antag- 
onist until  one  of  them  should  fall. 

Upon  the  whole,  I  am  of  opinion  that  the  motion  for  the 
new  trial  be  denied. 

Bbackenridge,  J.,  delivered  a  dissenting  opinion. 

New  trial  refused. 


CHAPTER  VIII. 

OBLIGATIONS  OF  AGENT  TO  PRINCIPAL. 

1.  Obedience. 

§  88.]     WHITNEY  et  al.  v.  MERCHANTS'  UNION 
EXPRESS   CO. 
104  Massachusetts,  152.  — 1870. 

Contract,  with  alternative  count  in  tort,  for  negligence  of 
defendants  in  the  matter  of  the  collection  of  a  draft  drawn  by 
plaintiffs,  at  Boston,  upon  Plummer  &  Co.,  at  Providence. 
Plaintiffs  instructed  defendants  to  return  the  draft  at  once  if  it 
was  not  paid.  Plummer  &  Co.  objected  to  the  draft  as  being 
$1.20  in  excess  of  their  debt,  and  offered  to  write  to  plaintiffs 
for  an  explanation.  Defendants  held  the  draft ;  Plummer  & 
Co.  wrote  to  plaintiffs  and  received  a  satisfactory  explanation  ; 
defendants  did  not  again  present  the  draft,  and  two  days 
after  Plummer  &  Co.  were  read}'  to  pay  it  the  firm  failed, 
and  paid  but  50  per  cent  of  its  liabilities.  This  action  is  to 
recover  the  balance,  by  way  of  damages,  from  defendants.  It 
was  agreed  that  if,  upon  the  facts,  the  jury  would  be  warranted 
in  finding  a  verdict  for  the  plaintiffs,  a  judgment  should  be 
entered  for  the  plaintiffs  for  $1,233.21  and  interest. 

Colt,  J.  Under  the  instructions  given  to  the  defendants 
at  the  time  they  received  this  draft  for  collection,  it  was  their 
duty  to  collect  it,  or  to  return  it  at  once  to  the  plaintiffs  if  not 
paid.  It  was  duly  presented  by  the  defendants'  messenger 
for  payment  on  the  14th  of  October,  and  payment  refused. 
Instead  of  returning  the  draft  at  once,  they  retained  posses- 
sion of  it,  in  order  to  enable  the  drawees  to  obtain,  by  corres- 
pondence, some  explanation  from  the  plaintiffs  as  to  the 

12 


178      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      [CH.  VIII. 

amount  for  which  it  was  drawn.  Satisfactory  explanations 
were  received  in  due  course  of  mail,  and  Pluinuier  &  Co.,  the 
drawees,  were  ready  on  the  morning  of  the  16th  of  the  same 
month  to  pay  the  full  amount.  But  the  draft  was  not  again 
presented,  and  on  the  19th  they  failed  and  have  since  been 
unable  to  pay. 

It  is  the  first  duty  of  an  agent,  whose  authority  is  limited,  to 
adhere  faithfully  to  his  instructions  in  all  cases  to  which  they 
can  be  properly  applied.  If  he  exceeds,  or  violates,  or  neglects 
them,  he  is  responsible  for  all  losses  which  are  the  natural 
consequence  of  his  act.  And  we  are  of  opinion  that  there  is 
evidence  of  neglect  in  this  case,  upon  which  the  jury  would 
have  been  warranted  in  finding  a  verdict  for  the  plaintiffs. 

The  defendants  would  clearly  have  avoided  all  liability  by 
returniug  the  draft  at  once,  upon  the  refusal  to  pay.  It  is 
urged  that  the  defendants  had  done  all  thej7  were  bound  to  do, 
when  they  had  presented  the  draft  and  caused  the  plaintiffs  to 
be  notified  of  its  non-pajment ;  that  the  notice  which  was 
immediately  communicated  by  the  letter  of  Plummer  &  Co., 
asking  explanation,  was  equivalent  to  a  return  of  the  draft ; 
that  this  notice  was  given  by  the  procurement  or  assent  of  the 
defendants,  as  early  as  they  would  be  required  to  give  it  if 
they  had  themselves  done  it  instead  of  intrusting  it  to  Plummer 
&  Co. ;  and  that,  after  the  receipt  of  it,  it  was  the  duty  of  the 
plaintiffs  to  give  new  instructions  if  they  desired  the  draft 
presented  for  pa}'ment  a  second  time. 

There  would  be  force  in  these  considerations  if  the  letter  of 
Plummer  &  Co.  was  onty  a  simple  notice  of  non-pajment, 
with  no  suggestion  of  further  action  in  regard  to  it.  It 
expresses  and  implies  much  more.  The  reason  for  the 
refusal  to  pay  is  stated,  and  the  plaintiffs  are  told  that  the 
defendants  will  hold  the  draft  until  they,  Plummer  &  Co.,  hear 
from  them.  Plainly,  if  the  defendants  avail  themselves  of  the 
letter  as  a  performance  of  their  obligation  to  give  notice,  they 
must  abide  by  the  whole  of  its  contents.  They  make  Plummer 
&  Co.  their  agents  in  writing  it,  and  authorize  the  plaintiffs 
to  rely  on  the  assurance  which  substantially  it  contains,  that 


§  89.]  HEIKEMANN  V.   HEARD.  179 

upon  the  receipt  by  Plummer  &  Co.  of  their  explanation  the 
draft  would  be  paid  or  returned,  or  notice  of  its  non-payment 
given.  There  is  no  suggestion  in  it  that  the  defendants  were 
awaiting  further  instructions  from  the  plaintiffs,  or  needed  or 
expected  them.  It  clearly  implies  that  the  defendants  had 
only  suspended,  at  the  suggestion  of  Plummer  &  Co.,  and  for 
their  accommodation,  the  further  performance  of  the  duty  they 
had  undertaken,  until  an  answer  and  explanation  could  be 
returned  to  Plummer  &  Co.  The  plaintiffs  had  no  new 
instructions  to  give,  nor  had  the  defendants  any  right  to 
expect  them.  They  trusted  to  others,  instead  of  correspond- 
ing themselves  with  the  plaintiffs,  who  in  this  matter  are  in 
no  respect  chargeable  with  neglect.  The  loss  is  wholly  due  to 
the  neglect  of  the  defendants,  and  must  be  borne  by  them. 
According  to  the  agreement  of  the  parties,  the  entry  must 
be  Judgment  for  the  plaintiffs. 


§88.]  BRAY  v.  GUNN. 

53  Georgia,  144.  — 1874. 
[Reported  herein  at  p.  100.] 

2.  Prudence. 

§  89.]  HEINEMANN  v.   HEARD. 

50  New  York,  27.  —  1872. 

Action  for  damages  for  breach  of  duty.  Non-suit,  and 
judgment  for  defendants.     Plaintiffs  appeal. 

Defendants  were  plaintiffs'  agents,  residing  in  China. 
Plaintiffs  sent  to  defendants  £15,000  for  the  purchase  of  teas 
and  silks,  with  instructions  as  to  amounts  and  prices.  De- 
fendants neglected  to  purchase  as  instructed.  It  appeared 
that  the  defendants  could  not  have  procured  the  tea  at  the 
price  fixed,  but  they  could  have  procured  the  silk.  They  waited, 


180      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      [CH.  VIII. 

however,  in  the  expectation  that  they  could  procure  it  at  a 
lower  price,  but  it  suddenly  advanced  beyond  the  price  fixed 
bj'  plaintiffs. 

Rapallo,  J.  (after  deciding  that  no  recovery  could  be  had 
for  the  failure  to  purchase  the  tea,  and  after  discussing  the 
evidence  as  to  the  possibility  of  purchasing  the  silk).  The 
question  iu  the  case  was  one  of  due  diligence,  and  we  think 
that  there  was  sufficient  evidence  to  go  to  the  jury  on  that 
point.  The  position  cannot  be  maintained  that  fraud  on  the 
part  of  the  agent  is  necessary  to  subject  him  to  an  action  for 
neglecting  to  perform  a  duty  which  he  has  undertaken.  An 
agent  is  bound  not  onfy  to  good  faith  but  to  reasonable 
diligence,  and  to  such  skill  as  is  ordinarily  possessed  by  per- 
sons of  common  capacity  engaged  in  the  same  _business. 
Story  on  Agency,  §§  183,  186.  Whether  or  not  he  has 
exercised  such  skill  and  diligence  is  usually  a  question  of 
fact ;  but  its  omission  is  equally  a  breach  of  his  obligation 
and  injurious  to  his  principal,  whether  it  be  the  result  of 
inattention  or  incapacity,  or  of  an  intent  to  defraud.  In  the 
case  of  Entwisle  v.  Dent  (1  Exch.  812)  there  was  an  ele- 
ment of  fraud  as  well  as  breach  of  dutj' ;  but  the  judgment 
of  the  court  was  not  founded  upon  the  fraud,  nor  could  it  be, 
as  the  action  was  for  breach  of  the  implied  contract  of  the 
defendant  to  act  according  to  instructions. 

As  an  independent  ground  for  sustaining  the  non-suit,  it  is 
claimed,  on  the  part  of  the  defendants,  that  the  order  to 
purchase  silk  was  discretionary,  and  that  for  that  reason 
they  are  not  responsible  in  damages  for  their  failure  to 
execute  it. 

By  reference  to  the  letter  of  December  23,  1864,  it  will  be 
seen  that  no  discretion  was  given  whether  or  not  to  pur- 
chase. The  order  to  invest  £5,000  in  silk  of  one  or  other  of 
the  particular  descriptions  mentioned,  and  at  the  prices 
named,  was  absolute.  The  only  matter  left  to  the  discretion 
of  the  defendants  was  the  selection  of  the  silks  as  well  as  the 
teas.  The}'  were  instructed  to  purchase  either  Cumchuck  at 
18s.,  or  No.  1  Loo  Kong,  or  Kow  Kong,  at  16s.,  and  were 


§  89.]  HEINEMANN  V.   HEARD.  181 

requested  to  obtain  all  white  if  possible ;  otherwise,  to 
separate  the  white  from  the  yellow.  No  other  matters  were 
left  to  their  discretion.  It  was  their  duty  to  select  some  of 
these  descriptions,  if  they  were  to  be  obtained,  and  to  use 
reasonable  diligence  in  obtaining  the  required  quantity  in 
time  to  ship  under  the  letter  of  credit.  It  is  argued  that  as 
they  had  discretion  in  the  selection  of  the  silks,  and  had  to 
determine  whether  it  was  possible  to  obtain  all  white,  no 
period  can  be  fixed  as  the  time  when  they  were  bound  to 
decide  these  matters  and  make  the  purchase.  This  argu- 
ment is  not  satisfactory.  The  necessity  of  making  a  selec- 
tion may  have  justified  them  in  not  accepting  the  first  offer 
which  they  may  have  met  with,  and  in  looking  further  for  the 
purpose  of  compbying  with  the  wishes  of  their  correspondents  ; 
but  it  would  not  justify  them  in  allowing  all  oppoi'tunities 
to  pass,  and  the  time  to  elapse  within  which  they  could  pur- 
chase under  the  letter  of  credit.  They  were  bound  to  make 
a  selection  within  a  reasonable  time,  and,  at  all  events; 
before  the  time  for  shipping,  under  the  credit,  expired.  The 
prices  appear  to  have  continued  below  their  limit  from  the 
early  part  of  June  until  the  first  term  of  the  letter  of  credit 
had  run  out ;  }-et  they  allowed  all  that  time  to  elapse  without 
making  an}'  selection.  Such  delay  was  certainty  evidence  of 
want  of  due  skill  and  diligence,  if  attributable  merely  to  \ 
failure  to  come  to  a  decision . 

But  the  defendants  do  not,  in  their  correspondence,  take 
any  such  ground,  or  claim  that  they  regarded  themselves  as 
having  any  discretion  as  to  purchasing  the  silks  and  tea. 
On  the  contrary,  in  their  letter  of  February  27,  1866,  they 
say:  "We  were  bound  to  follow  your  instructions  for  the 
investment  of  £15,000  credit  first  sent,  and  have  already  ex- 
plained to  you  our  reasons  for  not  having  purchased  silk  ;  " 
referring  to  their  letter  of  December  14,  1865*  They  rest 
their  justification  wholly  upon  the  ground  that  while  the  silks 
were  below  the  plaintiffs'  limits  they  held  off  in  the  attempt  to 
obtain  them  at  still  lower  prices.  They  were  scarcely  justi- 
fied, however,  in  persisting  in  this  attempt  until  it  became  too 


182      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      [CH.  VIII. 

late  to  ship  under  the  letter  of  credit  as  originally  drawn  or 
as  extended. 

(The  court  then  discusses  the  question  of  damages  and 
concludes)  :  It  is  enough,  at  the  present  stage  of  the  case, 
to  say  that  the  evidence  on  the  subject  of  damages  was  re- 
ceived without  objection,  and  that  the  non-suit  wa3  not 
moved  for,  or  granted  on  the  ground  of  any  defect  of  proof 
in  this  respect,  but  on  the  sole  ground  that  the  plaintiffs  had 
not  given  any  evidence  of  their  alleged  cause  of  action 
sufficient  to  go  to  the  jury.  We  think  they  have  shown 
enough  in  respect  to  the  silk  to  put  the  defendants  to  their 
defence,  and  that  the  judgment  should  therefore  be  reversed 
and  a  new  trial  granted,  with  costs  to  abide  the  event. 

All  concur.  Judgment  reversed. 


3.  Good  faith. 

§  90.]  GETSINGER  v.  BEYL.* 

80  Wisconsin,  443.  — 1891. 

Action  of  ejectment.  Judgment  for  plaintiff.  Defendant 
appeals. 

Defendant  relied  for  title  upon  certain  tax  deeds  issued  to 
himself  and  to  one  Steinke  in  his  behalf  and  upon  a  quit- 
claim deed  from  Steinke.  The  jury  found  specially  that  the 
defendant  was  the  agent  of  plaintiff  for  the  sale  or  care  of 
the  land  when  the  tax  deeds  were  executed,  and  that  (except 
as  to  these  tax  deeds)  plaintiff  was  the  owner  of  the  lands. 

Lyon,  J.  The  learned  counsel  for  defendant  earnestly  con- 
tended in  his  argument  that  there  is  no  testimonjT  to  support 
the  finding  of  the  jury  that  when  the  tax  deeds  were  executed 
defendant  was  the  agent  of  the  plaintiff  for  "  selling  or  car- 
ing for  the  plaintiffs  interest  in  the  land  in  question."  We 
do  not  agree  with  counsel  in  this  view  of  the  testimony. 

Plaintiff  resided  at  Rochester,  in  Minnesota,  and  the  de- 
fendant resided  in  Barron  County,  in  this  State,  near  the 


§  90.]  CONKEY  V.   BOND.  183 

land.  The  parties  had  considerable  correspondence  in  1869, 
1870,  and  1871,  concerning  the  land.  Some  of  the  letters 
which  passed  between  them  are  in  evidence,  and  the  contents 
of  others,  which  had  been  lost  or  destroyed,  were  testified  to 
on  the  trial.  This  testimony  will  not  be  repeated  here.  It 
is  sufficient  to  say  of  it  that,  if  true,  it  proves  that  the  de- 
fendant was,  at  the  times  mentioned,  the  agent  of  the  plain- 
tiff, not  only  to  look  after  and  care  for  the  land,  but  to  sell 
it.  In  either  case  it  was  a  violation  of  his  duty  to  t^k^a 
tax  deed  of  the  land  to  himself  or  another,  for  it  was  his 


duty  to  protect  and  preserve  plaintiff's  interest  therein. 
Hence  the  tax  deeds  were  a  fraud  upon  the  plaintiff,  and 
vested  in  defendant  no  title  to  the  land.  At  most,  the  pur- 
chase of  the  tax  certificates  by  the  defendant  was  a  redemp- 
tion of  the  land  from  the  tax  sales  thereof.  .  .   . 

We  conclude,  therefore,  that  the  finding  on  the  subject  of 
defendant's  agency  is  supported  by  the  testimony,  and  dem- 
onstrates that  the  defendant  took  no  title  to  the  land  under 
any  of  the  tax  deeds.  .  .  .  Judgment  affirmed. 


§  90.]  CONKEY  v.   BOND. 

36  New  York,  427.—  1867. 

Action  to  rescind  a  sale  of  stock  made  by  defendant  to 
plaintiff,  and  to  recover  the  amount  paid  therefor,  and  cer- 
tain payments  made  by  plaintiff  as  stockholder.  Judgment 
for  defendant.  Reversed  at  General  Term.  Defendant  ap- 
peals from  the  order  of  the  General  Term. 

Defendant,  as  agent,  undertook  to  purchase  stock  fori 
plaintiff,  and,  without  plaintiff's  knowledge,  transferred  terj 
shares  of  his  own  stock  to  plaintiff. 

Porter,  J.  T>ie_  fret  that  the  defendant  volunteered  his 
agency  did  not  absolve  hiig  flam  tfag  ifalg  of  fidelity  in  the 
relation  of  trust  and  confidence  which  he  sought  and  as- 
sumed.    The  plaintiff  was  induced  to  purchase  at  an  extrava- 


184      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.     [CH.  VEX 

gant  premium,  stock  of  the  value  of  which  he  was  ignorant, 
on  the  mistaken  representations  of  the  defendant,  who  pro- 
fessed to  have  none  which  he  was  willing  to  sell.  This 
assurance  very  naturally  disarmed  the  vigilance  of  the 
respondent,  and  he  availed  himself  of  the  defendant's  offer 
by  authorizing  him  to  buy  at  the  price  he  named. 

The  defendant  did  not  buy,  but  sent  him  a  certificate  for 
the  amount  required,  concealing  the  fact  that  he  had  not 
acted  under  the  authority,  and  that  the  stock  transferred  was 
his  own. 

There  is  no  view  of  the  facts  in  which  the  transaction  can 
be  upheld.  He  stood  in  a  relation  to  his  principal  which  dis- 
abled him  from  concluding  a  contract  with  himself,  without 
the  knowledge  or  assent  of  the  party  he  assumed  to  repre- 
sent. He  undertook  to  act  at  once  as  seller  and  as  pur- 
chaser.. He  bonght  as  agent,  and  sold  as  owner.  The 
ex  parte  bargain,  thus  concluded,  proved  advantageous  to 
him  and  very  unfortunate  for  his  principal.  It  was  the 
right  of  the  latter  to  rescind  it,  on  discovery  of  the  breach 
of  confidence.  It  is  not  material  to  inquire  whether  the 
defendant  had  any  actual  fraudulent  purpose.  The  mak- 
ing of  a  purchase  from  himself,  without  authority  from 
the  plaintiff,  was  a  constructive  fraud,  in  view  of  the  fidu- 
ciary relation  which  existed  between  the  parties.  In  such 
a  case,  the  law  delivers  the  agent  from  temptation  by  a 
presumptio  juris  et  de  jure,  which  good  intentions  are  un- 
availing to  repel.  It  is  unnecessary  to  state  our  views  more 
fully  on  this  question,  as  it  is  fully  and  ably  discussed  in  the 
opinion  delivered  by  Judge  Bacon  in  the  court  below,  and  his 
conclusions  are  abundantly  fortified  by  authority.  34  Barb. 
276  ;  Gillett  v.  Peppercorne,  3  Beavan,  78  ;  Story  on  Agency, 
§  214 ;  Michoud  v.  Girod,  4  How.  U.  S.  503  ;  Davone  v. 
Fanning,  2  Johns.  Ch.  252,  270 ;  Moore  v.  Moore,  1  Seld. 
256 ;  N.  T.  Central  Ins.  Co.  v.  Protection  Ins.  Co.,  14 
N.  Y.  85  ;   Gardner  v.  Ogden,  22  Id.  325. 

The  objection,  that  this  theory  is  inconsistent  with  that 
stated  in  the  complaint,  is  not  sustained  by  the  record.    The 


§  90.]  BUNKER  V.  MILES.  185 

essential  facts  are  alleged,  and  the  appropriate  relief  is  de- 
manded. The  fact  that  the  complaint  alleged  other  matters 
which  the  plaintiff  failed  to  establish,  impairs  neither  his 
right  nor  his  remedj7.     Utile  per  inutile  non  vitiatur. 

The  order  of  the  Supreme  Court  should  be  affirmed,  with 
judgment  absolute  for  the  respondent. 

All  the  judges  concurring.  Judgment  accordingly. 


§  90.]  BUNKER  v.  MILES. 

30  Maine,  431.  — 1849. 

Assumpsit  for  money  had  and  received.  Judgment  for 
plaintiff. 

Defendant  bought  a  horse  of  one  Seaver  for  $65,  and  agreed 
that  if  the  horse  sold  for  more  than  $65,  he  would  divide  the 
profit  with  Seaver.  Defendant  then  had  $80  of  plaintiff's 
money  with  which  to  buy  that  horse,  and  was  to  buy  it  as 
cheaply  as  possible  and  receive  one  dollar  for  his  services. 
Defendant  told  Seaver  he  had  sold  the  horse  for  $80,  and 
gave  Seaver  $7.50,  keeping  $7.50  for  himself.  Judgment  for 
$6.50  and  interest. 

Tenney,  J.  The  case  was  put  to  the  jury  upon  evidence 
introduced  bjT  the  plaintiff  alone.  It  appeared  that  he  placed 
in  the  hands  of  the  defendant  the  sum  of  $80,  and  requested 
him  to  obtain  a  certain  horse.  The  defendant  was  restricted, 
in  the  price  to  be  paid,  to  that  sum,  and  was  to  procure  the 
horse  at  a  less  price,  if  he  should  be  able  to  do  so,  it  being 
agreed  that  the  defendant  should  receive  the  sum  of  $1  for 
his  services  in  purchasing  the  horse.  He  obtained  the  horse 
and  delivered  him  to  the  plaintiff,  who  received  him  and  dis- 
posed of  him  the  same  day.  The  defendant  represented  to 
the  plaintiff,  that  he  had  saved  nothing  for  himself.  It  ap- 
pears by  other  testimony  that  the  price  paid  for  the  horse  by 
the  defendant  did  not  exceed  the  sum  of  $72.50. 

If  the  defendant  made  a  valid  contract  with  the  plaintiff,  to 


186      OBLIGATIONS  OP  AGENT  TO  PRINCIPAL.      [CH.  VIII. 

do  the  service  requested  as  an  agent,  and  did  do  it  as  was 
agreed,  he  was  not  at  liberty  to  make  a  profit  to  himself  in 
the  transaction,  in  which  he  was  acting  as  the  agent ;  and 
whatever  sum  remained  in  his  hands,  after  paying  the  price  of 
the  horse,  deducting  the  compensation  to  be  made  to  him, 
was  the  money  of  the  plaintiff,  for  which  the  equitable  action 
of  money  had  and  received  could  be  maintained.  The  in- 
structions to  the  jury  were  consistent  with  these  principles, 
and  a  verdict  was  rendered  for  the  plaintiff. 

Exceptions  overruled. 


§  90.]  HEGENMYER  v.  MARKS. 

37  Minnesota,  6.  — 1887. 
[Reported  herein  at  p.  339.] 

4.   Accounting. 

§  91.]  BALDWIN  BROS.  v.  POTTER. 

46  Vermont,  402.—  1874. 

Assumpsit.    Judgment  for  plaintiffs.    Defendant  appeals. 

Defendant,  as  plaintiffs'  agent,  sold  prize  packages  of 
candies  and  collected  the  price.  Defendant  refused  to  account 
for  the  moneys  or  for  samples  of  the  prizes  intrusted  to  him, 
and  defended  upon  the  ground  of  the  illegality  of  the  trans- 
action. 

Pierpoint,  C.  J.  We  do  not  find  it  necessary  in  this  case 
to  consider  the  question  as  to  whether  the  contract  for  the 
sale  of  the  property  referred  to,  by  the  plaintiffs,  to  the  several 
persons  who  purchased  it,  were  contracts  made  in  violation 
of  law,  and  therefore  void,  or  not.  This  action  is  not  between 
the  parties  to  those  contracts  ;  neither  is  it  founded  upon,  or 
brought  to  enforce  them.  If  those  contracts  were  illegal,  the 
law  will  not  aid  either  party  in  respect  to  them ;  it  will  not 


§  91.]  BALDWIN  BEOS.   V.   POTTEE.  187 

allow  the  seller  to  sue  for  and  recover  the  price  of  the  prop- 
erty sold,  if  it  has  not  been  paid ;  if  it  has  been  paid,  the 
purchaser  cannot  sue  for  and  recover  it  back.  The  facts  in 
this  case  show  that  the  purchasers  paid  the  money  to  the 
plaintiffs,  not  to  the  plaintiffs  personally,  but  to  the  defendant 
as  the  agent  of  the  plaintiffs,  authorized  to  receive  it.  When 
the  money  was  so  paid  it  became  the  plaintiffs'  money,  and 
when  it  was  received  by  the  defendant  as  such  agent,  the 
law,  in  consideration  thereof,  implies  a  promise,  on  the  part  of 
the  defendant,  to  paj*  it  over  to  his  principals,  the  plaintiffs ; 
it  is  this  obligation  that  the  present  action  is  brought  to 
enforce :  no  illegality  attaches  to  this  contract.  But  the  de- 
fendant insists  that,  inasmuch  as  the  plaintiffs  could  not  have 
enforced  the  contracts  of  sale  as  between  themselves  and  the 
purchaser,  therefore,  as  the  purchaser  has  performed  the  con- 
tracts by  paj'ing  the  money  to  the  plaintiffs  through  me,  as 
their  agent,  I  can  now  set  up  the  illegality  of  the  contract  of 
sale  to  defeat  an  action  brought  to  enforce  a  contract  on  my 
part  to  pay  the  mone}*,  that  I  as  agent  receive,  over  to  my 
principal.  In  other  words,  because  my  principal  did  not 
receive  the  money  on  a  legal  contract,  I  am  at  liberty  to  steal 
the  money,  appropriate  it  to  my  own  use,  and  set  my  principal 
at  defiance.  We  think  the  law  is  well  settled  otherwise,  and 
the  fact  that  the  defendant  acted  as  the  agent  of  the  plaintiffs 
in  obtaining  orders  for  the  goods  does  not  vary  the  case. 
Tenant  v.  Elliot,  1  B.  &  P.  3  ;  Armstrong  x.  Toler,  11  Wheat. 
258  ;  Evans  v.  City  of  Trenton,  4  Zab.  (N.  J.)  764. 

We  think  the  certificate  granted  by  the  county  court  was 
properly  granted.  It  has  been  urged  in  behalf  of  the  de- 
fendant, that  the  zeal  with  which  he  has  defended  this  case 
shows  that  he  intended  no  wrong ;  but  we  think  the  man  who 
receives  money  in  a  fiduciary  capacit}*,  and  refuses  to  pa}*  it 
over,  does  not  improve  his  condition  by  the  tenacity  with 
which  he  holds  on  to  it. 

Judgment  of  the  county  court  affirmed. 


188      OBLIGATIONS  OF  AGENT  TO  PKINCIPAL.      [CH.  VIII. 


§91.]         BAKER  v.    NEW  YORK    NATIONAL 
EXCHANGE  BANK. 


100  New  York,  31.  — 1885. 
[Reported  herein  at  p.  341.] 


§91.]        RIEHL  v.  EVANSVILLE  FOUNDRY 
ASSOCIATION. 


104  Indiana,  70.  — 1885. 
[Reported  herein  at  p.  344.] 


5.   Appoinment  of  sub-agents. 

§93.J  COMMERCIAL  BANK  OF  LAKE  ERIE 

v.  NORTON  et  al. 

1  Hill  (N.  Y.),  501.  —  1841. 

Assumpsit  by  plaintiffs  as  indorsees  against  defendants 
as  acceptors  of  two  bills  of  exchange.  Verdict  for  plaintiffs. 
Defendants  move  for  a  new  trial. 

E.  Norton  &  Co.,  the  defendants,  authorized  H.  Norton, 
their  general  agent,  to  accept  bills.  H.  Norton  directed 
Cochrane,  a  book-keeper,  to  accept  these  bills,  which  he  did 
by  writing  across  the  bills,  "  E.  Norton  &  Co.  —  per  A.  G. 
Cochrane."  Cochrane  had  no  authority  from  E.  Norton  & 
Co.  to  accept  bills. 

By  the  Court,  Cowen,  J.  (after  deciding  that  there  was 
evidence  to  go  to  the  jury  that  H.  Norton  had  authority  to 
accept  the  bills).  But  it  is  said  he  could  not  delegate  the 
power  to  accept  This  is  not  denied,  nor  did  he  do  so.  The 
bills  came  for  acceptance ;  and  having  as  agent  made  up  his 
mind  that  they  should  be  accepted,  he  directed  Cochrane, 


§  93.]  COMMERCIAL  BANK  V.   NORTON.  189 

the  book-keeper,  to  do  the  mechanical  part,  —  write  the  ac- 
ceptance across  the  bills.  He  was  the  mere  amanuensis. 
Had  anjthing  like  the  trust  which  is  in  its  nature  personal  to 
an  agent,  —  a  discretion  for  instance  to  accept  what  bills  he 
pleased,  —  been  confided  to  Cochrane,  his  act  would  have 
been  void.  But  to  question  it  here  would  be  to  deny  that  the 
general  agent  of  a  mercantile  firm  could  retain  a  carpenter  to 
make  a  box,  or  a  cooper  to  make  a  cask.  The  books  go  on 
the  question  whether  the  delegation  be  of  a  discretion.  Such 
is  the  very  latest  case  cited  by  the  defendants'  counsel 
{Emerson  v.  The  Prov.  Hat  Manuf.  Co.,  12  Mass.  Rep. 
237,  241,  2)  ;  and  the  latest  book  (2  Kent's  Com.  633, 
4th  ed.).  Blore  v.  Sutton  (3  Meriv.  237)  is  among  the 
strictest  cases  I  have  seen.  There  the  clerk  of  the  agent  put 
his  own  initials  to  the  memorandum,  by  direction  of  the  agent ; 
and  held,  insufficient.  Henderson  v.  Barnewall  (1  Young  & 
Jerv.  387)  followed  it.  Both  were  cases  arising  under  the 
Statute  of  Frauds,  which  requires  that  the  memorandum 
should  be  signed  by  the  principal  or  his  agent ;  and,  I  admit, 
it  is  very  difficult  to  distinguish  the  manner  of  the  signatures 
there  from  that  now  in  question,  by  Cochrane.  Everything 
there  seems  to  have  been  mechanical  merely,  as  here ;  and 
there  ma}*  be  some  doubt,  I  should  think,  whether  such  cases 
can  be  sustained.  At  anj'  rate,  in  our  attempt  to  applj' 
them,  we  are  met  with  a  case  as  widety  the  other  way ;  Ex 
parte  Sutton,  2  Cox,  84.  The  rule  as  there  laid  down  is, 
that  "  an  authority  given  to  A.  to  draw  bills  in  the  name  of 
B.  may  be  exercised  b}r  the  clerks  of  A."  Such  is  the  mar- 
ginal note,  and  it  is  entirely  borne  out  by  the  case  itself. 
Peter  Marshall  wrote  to  Lewis  &  Potter  authorizing  them  "  to 
make  use  of  his  name  by  procuration  or  otherwise  to  draw 
bills  on  G.  &  J."  The  clerk  of  Lewis  &  Potter  drew  the 
bill,  signing  thus :  "By  procuration  of  Peter  Marshall, 
Robert  Edgecumbe."  The  Lord  Chancellor  put  it  on  the 
ground  that  the  signature  of  the  clerk  would  have  bound 
Lewis  &  Potter,  had  he  signed  their  name  under  the  general 
authority  which  he  had. 


190      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      [CH.  VHI. 

We  thus  make  verj'  little  progress  one  way  or  the  other  on 
direct  English  authority.     Left  to  go  on  the  principle  of  any 
other  English  case  I  have  seen,  and  there  are  man},  all  we 
have  to  say  is,   I  think,   that  the  agent  shall  not  delegate 
his  discretion ;  but  may  at  least  do  an}7  mechanical  act  by 
deputy.     I  do  not  know  that  the  language  of  Lord  Ellen- 
borough  in  Mason  v.  Joseph  (1  Smith's  Rep.  406)  has  been 
anywhere  directty  carried  into  an  adjudication.    But  it  sounds 
so  much  like  all  the  cases  professing  to  go  on  principle,  that 
I  can  scarce  1}'  doubt  its  being  law.     His  lordship  said,  "  It 
is  true  an  attornej*  appointed  by  deed  cannot  delegate  his 
authority  to  a  third  person.     He  must  exercise  his  own  judg- 
ment on  the  principal  subject  for  the  purpose  of  which  he 
is  appointed ;  but  as  to  an}*  mere  ministerial  act,  it  is  not 
necessarj*  that  he  should  do  it  in  person,  if  he  direct  it  to 
be  done,  or  upon  a  full  knowledge  of  it  adopt  it.     Suppose 
for  instance  he  had  got  the  gout  in  his  hands,  and  could  not 
actualty  sign  himself,  he  might  have  authorized  another  to 
sign  for  him." 

•  •••••• 

New  trial  denied. 


§  93.]  WRIGHT  v.  BOYNTON. 

37  New  Hampshire,  9.  — 1858. 

Action  against  defendant,  as  a  partner  in  the  firm  of 
William  Hay  ward  &  Co.,  upon  promissory  notes  signed  in 
the  firm  name  by  the  hand  of  Willard  Russell.  Verdict  for 
defendant. 

Bell,  J.  .  .  .  The  defendant,  Boynton,  executed  to 
Russell  a  power  of  attorney,  by  which  he  appointed  him  his 
agent,  and  authorized  him  to  purchase  and  sell  certain  kinds 
of  goods,  in  his  name,  and  to  transact  business  of  that  kind 
with  capital  furnished  by  him,  and  to  use  his  name  generally 
in  the  business.     Russell,  in  the  name  of  Boynton,  entered 


§  93.]  WEIGHT  V.  BOYNTON.  191 

into  partnership  with  Hay  ward,  the  other  part}-  named  in  the 
writ,  in  a  business  of  that  kind.  The  court  held  that  the 
power  of  attorney  did  not  give  to  Russell  the  power  to  make 
Boynton  a  partner  with  Hayward,  and  we  think  rightly. 

One  who  has  a  bare  power  or  authority  from  another  to  do 
an}*  act,  must  execute  it  himself,  and  cannot  delegate  it  to  a 
stranger ;  for,  this  being  a  trust  or  confidence  reposed  in  him 
personally,  it  cannot  be  assigned  to  one  whose  integrity  or 
ability  may  not  be  known  to  the  principal,  and  who,  if  he 
were  known,  might  not  be  selected  by  him  for  such  a  purpose. 
The  authority  is  exclusively  personal,  unless,  from  the  express 
language  used,  or  from  the  fair  presumptions  growing  out  of 
the  particular  transaction,  a  broader  power  was  intended 
to  be  conferred.  Story  on  Agency,  sees.  13,  14  •  2  Kent's 
Com.  633;  Pale}'  on  Agency,  175;  Broom's  Maxims.  665 ; 
Bank  v.  Norton,  1  Hill,  501 ;  Cochran  v.  Irlam,  2  M.  &  S. 
301. 

Now  each  partner  possesses  an  equal  and  general  power 
and  authority,  independently  of  articles,  or  express  stipula- 
tions regulating  their  powers,  in  behalf  of  the  firm,  to  transfer, 
pledge,  exchange,  or  apply,  or  otherwise  dispose  of  the  part- 
nership property  and  effects,  for  any  and  all  purposes,  within 
the  scope  and  objects  of  the  partnership,  and  in  the  course  of 
its  trade  or  business.  Story  on  Part.  144.  He  may  pledge 
the  credit  of  his  partners  to  any  amount,  and  in  all  simple 
contract  dealings,  relating  to  the  partnership  business,  he  is, 
in  his  own  person,  the  representative  of  the  firm,  and  the  act 
of  one  partner  is  the  act  of  all.  Car}'  on  Part.  29,  30 ; 
3  Kent's  Com.  41,  43.  Powers  thus  broad  cannot  be  con- 
ferred by  a  mere  agent  on  a  stranger,  without  express 
authority. 

•  •••••• 

Judgment  on  the  verdict. 


192      OBLIGATIONS  OF  AGENT  TO  PKINCIPAL.      [CH.  Vm. 


§  95.]    POWER  et  al.  v.  FIRST  NATIONAL  BANK. 
6  Montana,  251.  — 1887. 

Action  to  recover  the  amount  of  a  draft  deposited  by 
plaintiffs  with  defendant  for  collection.  Defendant  sent  the 
draft  to  its  correspondent  at  the  place  of  payment.  The 
correspondent  collected  the  draft,  but  failed  to  remit,  and 
subsequently  became  insolvent.  Judgment  for  defendant 
Plaintiffs  appeal. 

McLeary,  J.  .  .  .  The  question  of  how  far  a  bank  is 
liable  for  the  default  of  a  correspondent  or  collecting  agent 
in  regard  to  a  collection  is  one  which  has  been  solved  in  at 
least  threegdiffeient  wavs-bv  the  many  courts  of  last  resort  in 
the  United  States  which  have  at  different  times  had  the 
matter  under  consideration.  One  class  of  cases  maintains  the 
absolute  liability  of  a  bank  for  any  default  of  its  correspon- 
dent or  collecting  agent,  in  the  same  manner  as  it  would  be 
for  the  default  of  its  own  employes^  on  the  principle  that  the 
bank,  by  undertaking  the  collection,  obligated  itself  to  see 
that  every  proper  measure  was  taken,  and  regarding  the 
collector  as  the  agent  of  the  bank,  and  not  as  the  agent  of 
the  owner  of  the  commercial  paper.  A  second  class  of  cases 
holds  that  the  bank  is  liable  only  for  the  exercise  of  due  care 
andjhligence ^  in  selecting  a  trustworthy  agent  or  correspon- 
dent, and  that  there  is  in  the  deposit  for  collection  the  im- 
plied authority  to  employ  a  sub-agent,  and  that  jsuch  sub-agent 
becomes,  when  chosen,  the  agent  of  the  holder,  and  not  of 
the  bank  which  selected  him.  The  third  class  of  cases  draws 
a  distinction  between  the  cases  in  which  the  payer  resides 
where  the  bank  is  situated,  and  the  cases  where  he  resides  at 

— . —        ■  ■■  ■■■  -■  ■■■       —    —i    i  ■      — ■% 

a  distance :  in  the  first  place  making  the  bank  liable  abso- 
Intelyjor  any  dp.fa.nl t  or  wrongful  act,  and  in  fhg  qp^nr]  plfl^f 
only  making  the  bank  liable  for  the  proper  selection  of  a  com- 
petent amij-eliable  agentj  with  proper  instruction.  1  Daniel, 
Neg7lnstT341. 


§  95.]  POWER   V.  FIRST  NATIONAL  BANK.  193 

The  cases  of  the  first  class  are  found  principally  in  the 
decisions  of  the  courts  of  the  United  States  and  the  States  of 
New  York,  New  Jersey,  Pennsylvania,  Ohio,  and  Indiana. 
The  cases  of  the  second  class  are  found  chiefly  in  the  reports 
of  Massachusetts,  Connecticut,  Maryland,  Mississippi,  Mis- 
souri, and  Iowa.  The  third  class  of  cases  is  made  up  of 
those  decided  by  the  courts  of  Illinois,  Tennessee,  Wisconsin, 
and  Louisiana. 

Inasmuch  as  there  is  such  a  variety  of  opinions  to  be  found 
among  the  highest  courts  on  this  important  question,  it  is 
proposed  to  examine  at  some  length  such  of  them  as  are 
accessible  to  us,  and  thence  deduce  what  we  consider  to  be 
the  true  rule  governing  such  cases. 

There  has  never  been  emy  adjudication  on  a  question  simi- 
lar to  this  in  this  court ;  and  so  far  as  concerns  this  territory, 
this  is  a  case  of  first  impression. 

(The  court  then  makes  an  exhaustive  review  of  the  author- 
ities, which  is  too  extended  to  reprint  here.) 

The  foundation  for  all  the  differences  of  opinion  among  the 
learned  judges  who  have  had  the  matter  under  consideration 
appears  clearly  to  rest  in  the  interpretation  of  the  implied 
contract  between  the  depositor  and  the  bank  at  the  time  the 
negotiable  paper  is  deposited  for  collection.  Where  there  is 
an  express  contract,  it  must,  of  course,  be  followed,  and 
there  is  no  room  for  a  difference  of  opinion ;  and  all  of  the 
decisions  herein  styled  cases  of  the  second  and  third  classes 
are  founded  on  the  idea  that  the  course  of  business  or  the 
customs  of  bankers,  or  the  necessities  of  the  case,  or  the 
peculiar  circumstances,  raise  some  other  presumption  than 
the  one  that  the  bank  receiving  the  deposit  for  collection 
undertakes  to  collect  it,  and  assumes  all  the  risks  from  the 
negligence  or  default  of  the  agents  which  it  employs.  We 
do  not  believe  that  any  other  contract  can  be  inferred  from 
the  mere  tender  and  acceptance  of  negotiable  paper  for  col- 
lection. No  matter  where  the  debtor  may  reside,  nor  what 
agencies  it  is  necessary  to  employ  in  the  collection,  the  de- 
positor is  not  supposed  to  be  acquainted  with  the  methods 

13 


194      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.     [CH.  VHI. 

to  be  employed  by  the  bank  in  collecting  its  paper,  or  the 
carefulness,  skill,  solvency,  or  honesty  of  the  agents  whom 
it  may  be  necessary  to  employ  in  such  collections.  Besides, 
it  is  the  universal  custom  of  banks,  on  receiving  collections, 
to  passthem  to  the  credit  of  the  owner,  and  to  indorse  And 
transmit  them  to  their  correspondents,  where  they  are  in  like 
manner  passed  to  the  credit  of  the  indorser,  and  so  on  until 
collection ;  and,  if  the  collection  fails  on  account  of  the  in- 
solvency of  the  debtor,  and  through  no  fault  of  any  inter- 
mediate bank  or  agent,  the  paper  is  returned,  and  charged 
back,  until  it  reaches  the  original  depositor  and  indorser, 
who  is  called  upon  to  make  it  good.  Such  was  the  course 
pursued  in  the  case  at  bar,  and  the  defendant  is  clearly  liable 
for  the  amount  collected. 

On  mature  consideration  of  the  authorities,  supporting  all 
shades  of  opinion  on  this  subject,  we  fully  agree  with  the 
views  expressed  in  1  Daniel,  Neg.  Inst.  §  342,  and  hold  that, 
in  the  absence  of  a  special  contract,  a  bank  is  absolutely 
liable  for  any  laches,  negligence,  or  default  of  its  corre- 
spondent whereby  the  holder  of  negotiable  paper  suffers  loss. 
By  such  a  rule  alone  can  the  depositor  who  intrusts  his  busi- 
ness  to  a  bank  be  secure  against  carelessness  or  dishonesty 
on  the  part  of  collecting  agencies  employed  by  banks  to  carry 
out  their  contracts.  Banks  can  easily  avoid  the  effects  of 
this  stringent  rule  bj*  making  special  contracts  in  special 
cases,  or  declining  to  undertake  collections  at  points  where 
they  have  an}'  fears  as  to  the  reliability  or  solvency  of  the 
agents  whom  they  will  be  obliged  to  emplo}7 ;  but  when  they 
undertake  collections,  either  at  their  own  location,  or  at 
distant  points,  without  a  special  contract  limiting  their  lia- 
bility, they  must  be  held  to  do  so  for  a  sufficient  consid- 
eration, and  to  be  responsible  absolutely  to  the  owner  of 
negotiable  paper  for  the  payment  of  all  money  collected 
thereon,  and  for  all  losses  occurring  through  the  negligence 
of  the  agent,  resulting  in  a  failure  to  make  such  collection. 

In  accordance  with  these  views,  the  judgment  is  hereby 
reversed,  and  the  case  remanded  for  a  new  trial. 

Judgment  reversed. 


§  95.]        GUELICH  V.  NATIONAL  STATE  BANK.  195 

§  95.]    GUELICH  v.  NATIONAL  STATE  BANK. 
56  Iowa,  434.  — 1881. 

Action  to  recover  the  amount  of  a  bill  of  exchange  depos- 
ited with  defendant  for  collection  by  plaintiff's  testator,  which 
defendant  failed  to  present  for  pa3'ment  to  the  drawee  or  to 
protest  for  non-payment,  whereby  the  other  parlies  to  the 
paper  were  discharged.  There  was  a  trial  by  the  court  with- 
out a  jury  and  judgment  for  plaintiff;  defendant  appeals. 
The  facts  of  the  case  appear  in  the  opinion. 

Beck,  J.  I.  The  paper  in  question  in  this  suit  was  a 
foreign  bill  drawn  in  Munich,  Westphalia,  upon  New  York, 
and  was  deposited  with  defendant  for  collection.  In  the 
usual  course  of  business  of  the  bank,  it  was  sent  by  defend- 
ant to  its  correspondent,  the  Metropolitan  Bank  of  New 
York.  It  ma}r  be  conceded,  in  the  view  we  take  of  the  case, 
that,  for  the  reason  the  paper  was  not  presented  for  payment 
and  protested  for  non-pajment  by  the  New  York  bank  within 
the  time  required  by  law,  the  drawers  and  indorsers  of  the 
bill  were  discharged.  Counsel  for  defendant  insist  that  for 
the  reason  the  paper  was  over  due  when  received  by  defend- 
ant no  liability  attaches  for  failure  to  protest  it  for  non-pay- 
ment. They  also  argue  that  defendant  as  a  national  bank  is 
not  liable  for  the  default  charged  in  the  petition.  These  and 
other  questions  discussed  by  counsel  we  need  not  consider,  as 
the  decision  of  the  case  turns  upon  another  point  arising 
upon  facts  we  have  just  stated. 

II.  The  question  which,  in  our  opinion,  is  decisive  of  the 
case,  is  this :  Is  defendant  liable  for  the  default,  nf  it«  ™vrrpfl. 
pondent,  the  New  York  BankT  in  failing  to  present  and  pro- 
test^ the  bill  in  due  time? 

The  paper  was  deposited  with  defendant  for  collection  ;  it 
was  payable  in  New  York.  The  course  of  business  of 
defendant,  and  all  other  banks,  is,  in  such  cases,  to  make 
collections  through  correspondents.    They  do  not  undertake 


196      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      fJCH.  VEI. 

themselves  to  collect  the  bills,  but  to  intrust  them  to  other 
banks  at  the  place  paj'ment  is  to  be  made.  The  holder  of 
the  paper,  having  full  notice  of  the  course  of  business,  must 
be  held  to  assent  thereto.  He,  therefore,  authorizes  the  bank 
with  whom  he  deals  to  do  the  work  of  collection  through 
another  bank. 

We  will  now  inquire  as  to  the  relations  existing  between 
the  bank  charged  with  the  collection  of  the  paper,  and  the 
holder  depositing  it  with  the  first  bank. 

The  bank  receiving  the  paper  becomes  an  agent  of  the 
depositor  with  authority  to  employ  another  bank  to  collect  it. 
The  second  bank  becomes  the  sub-agent  of  the  customer  of 
the  first,  for  the  rppann  that  the  customer  authorizes  frhe 
employment  of  such  an  agent  to  make  the  collection. 

The~~paper  remains  the  property  of  the  customer,  and  is 
collected  for  him ;  the  party  employed,  with  his  assent,  to 
make  the  collection,  must  therefore  be  regarded  as  his  agent. 

A  sub-agent  is  accountable  ordinarily  only  to  his  superior 
agent  when  employed  without  the  assent  or  direction  of  the 
principal.  But  if  he  be  employed  with  the  express  or  implied 
assent  of  the  principaLj&e  superior  agent  will  not  be  respon- 
sibleTorjnjjicJiaL  There  is,  in  such  a  case,  a  privity  between 
the  sub-agent  and  the  principal,  who  must,  therefore,  seek  a 
remedy  directly  against  the  sub-agent  for  his  negligence  or 
misconduct.  Story  on  Agency,  sees.  217  and  313.  These 
familiar  rules  of  the  law,  applied  to  the  case,  relieve  it  of  all 
doubt  when  considered  in  the  light  of  legal  principles. 

III.  But  there  is  conflict  in  the  adjudged  cases  upon  the 
question  of  the  direct  liability  of  the  bank  employed  as  a  sub- 
agent  to  the  holder  of  the  paper,  for  negligence  or  default  in 
its  collection.  The  preponderance  of  the  authorities  strongly 
supports  the  conclusion  we  have  just  reached  in  this  case. 
The  following  cases  are  to  this  effect :  Dorchester  &  Milton 
Bank  v.  New  England  Bank,  1  Cush.  177  ;  Fab  ens  v.  Mer- 
cantile Bank,  23  Pick.  330 ;  Lawrence  v.  Stonington  Bank, 
6  Conn.  521 ;  East  Haddam  Bank  v.  Scovil,  12  Conn.  303 ; 
Hyde  et  al.  v.  Planters'  Bank,  17  La.  Ann.  560  ;  Baldwin  v. 


§  95.J        GTJELICH   V.   NATIONAL   STATE  BANK.  197 

Bank  of  Louisiana,  1  La.  Ann.  13  ;  JEtna  Insurance  Co.  v. 
Alton  City  Bank,  25  111.  221  ;  Stacy  v.  Dane  County  Bank, 
12  Wis.  629  ;  Tiernan  v.  Commercial  Bank,  7  How.  (Miss.) 
648  ;  Agricultural  Bank  v.  Commercial  Bank,  7  Sm.  &  M. 
592 ;  Bowling  v.  Arthur,  34  Miss.  41 ;  Jackson  v.  Union 
Bank,  6  Har.  &  J.  146 ;  Citizens'  Bank  v.  Howell,  8  Md. 
530 ;  Bank  of  Washington  v.  Triplett,  1  Pet.  25  ;  Mechan- 
ics' Bank  v.  Earp,  4  Rawle,  384 ;  Bellemire  v.  The  U.  S. 
Bank,  1  Miles,  173 ;  S.  C.  4  Wheat.  105 ;  Daly  v.  Butchers' 
&  Drovers'  Bank,  56  Mo.  94 ;  Smedes  v.  The  Bank  of 
TJtica,  20  Johns.  372. 

IV.  The  following  cases  hold  that  the  bank  to  whom  a  bill 
or  note  is  sent  for  collection  by  another  bank  is  not  the 
agent  of  the  owner  of  the  paper :  Allen  v.  Merchants'  Bank, 
22  Wend.  215  ;  Downer  v.  Madison  Co.  Bank,  6  Hill,  648  ; 
Montgomery  Co.  Bank  v.  Albany  City  Bank,  3  Seld.  459  ; 
Commercial  Bank  v.  Union  Bank,  1  Kern.  203 ;  S.  C.  19 
Barb.  391  ;  Ayrault  v.  Pacific  Bank,  47  N.  Y.  570;  Indig 
v.  Brooklyn  City  Bank,  16  Hun,  200 ;  Beeves  v.  St.  Bank 
of  Ohio,  8  Ohio  St.  465. 

V.  Bradstreet  v.  Everson,  72  Pa.  St.  124;  Lewis  <& 
Wallace  v.  Peck  &  Clark,  10  Ala.  142,  and  Pollard  v. 
Rowland,  2  Blackford,  22,  are  sometimes  quoted  as  accord' 
ing  with  the  cases  last  cited.  We  think  the}'  are  distin- 
guished from  all  the  conflicting  cases  above  referred  to,  by 
the  fact  that  the  parties  receiving  the  paper,  being  collecting 
agents  onlj',  became  bound,  either  by  express  or  implied 
contracts,  to  make  the  collections  themselves.  In  the  other 
cases  there  was  no  such  contract  shown,  but  on  the  contrary 
it  appears  that  banks  in  their  usual  course  of  business 
make  collections  of  notes  and  bills  at  distant  places  through 
their  correspondents,  with  the  implied  assent  of  the  parties 
depositing  such  paper  with  them.  The  collecting  bank  thus 
becomes  the  sub-agent  of,  and  is  responsible  to,  the  owners 
of  the  paper.  See  Story  on  Agency,  sec.  217  a,  and  cases 
cited. 

The  decision  in  Bank  of  Washington  v.  Triplett,  1  Pet 


198      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      [CH.  VHI. 

25,  and  Mechanics'  Bank  v.  Earp,  4  Rawle,  384,  are  based 
upon  the  ground  that  the  paper  in  each  case  was  deposited 
for  transmission,  and  not  for  collection,  that  is,  the  receiving 
bank  undertook  to  transmit  the  paper  to  its  correspondent 
and  not  to  collect  it.  This  very  element,  in  our  opinion,  is 
in  all  the  cases  cited  to  support  our  position,  and  in  the  case 
before  us.  Under  the  usage  of  banks,  paper  received  for 
collection  at  the  places  other  than  the  town  or  oh.y  wh^re  jfofi 
receiving  bank  is  located,  is  received  under  the  implied  con- 
tract that  it  is  accepted  for  transmission  to  correspondents 
at  the  place  where  it  is  payable.  These  cases,  we  think,  are 
in  accord  with  the  other  decisions  we  have  cited  in  support 
of  our  views. 

Mackersy  v.  Ramsay s,  9  Clark  &  F.  818,  is  not  in  conflict 
with  the  doctrine  we  adopt.  In  that  case  the  receiving  bank 
expressly  undertook  to  forward  the  paper,  and,  upon  its  pay- 
ment, to  place  the  amount  thereof  to  the  credit  of  the  deposi- 
tor, and  for  the  performance  of  its  undertaking  it  was  to 
receive  a  commission.  The  paper  was  collected  by  its  cor- 
respondent, who  failed  soon  after,  and  the  bank  receiving 
the  paper  from  its  customer,  never  received  the  funds. 
Surely  under  this  contract  to  credit  its  customers  with  the 
amount  of  the  paper  upon  payment,  the  bank  would  be  bound 
to  give  him  credit  when  it  was  paid  to  its  correspondent, 
and  thus  become  directly  liable  for  the  money  to  the 
customer. 

Allen  v.  The  Merchants'  Rank,  22  Wend.  215,  which 
established  the  doctrine  afterwards  followed  in  New  York, 
was  announced  by  a  divided  court,  fourteen  senators  con- 
curring in  the  decision,  and  ten,  with  Chancellor  Walworth, 
dissenting.  The  case,  however,  has  been  uniformly  followed 
in  New  York. 

(The  court  then  distinguishes  the  case  of  Hoover  v.  Wise, 
91  U.  S.  308,  which  is  superseded  as  an  authority  on  this 
point  by  Exchange  Nat.  Bank  v.  Third  Nat.  Bank,  112 
U.  S.  276,  decided  in  1884.) 

In  many  of  the  cases  above  cited  banks  were  held  not  to 


§  97.]  DELANO  V.   CASE.  199 

be  liable  for  the  negligence  of  notaries  to  whom  paper  was 
delivered  for  protest.  Undoubtedly  the  doctrines  which 
would  relieve  a  bank  from  liability  for  the  negligence  of  a 
notary  would  protect  it  when  charged  with  liability  for  the 
negligent  act  of  a  correspondent. 

It  may  be  remarked  that  while  a  bank  is  not  responsible 
for  the  defaults  of  proper  and  competent  sub-agents,  it 
becomes  liable  if  negligent  in  selecting  incompetent  and 
improper  agents  to  whom  it  intrusts  paper  for  collection. 

We  are  of  the  opinion  that  the  district  court  erred  in  ren- 
dering a  judgment  against  defendant  upon  the  facts  before  it. 

Reversed. 


6.  Obligations  of  gratuitous  agents. 

§  97.]  DELANO  v.   CASE. 

121  Illinois,  247.  — 1887. 

Mr.  Justice  Scholfield  delivered  the  opinion  of  the 
court. 

This  was  case,  in  the  circuit  court  of  Macoupin  County, 
b}*  a  general  depositor  in  a  bank,  against  directors  of  the 
bank,  for  negligence  in  permitting  it  to  be  held  out  to  the 
public  as  solvent,  when  in  fact  it  was,  at  the  time,  insolvent. 
Judgment  was  rendered  for  the  plaintiff  in  that  court,  and 
that  judgment  was  affirmed,  on  appeal  to  the  Appellate 
Court  for  the  Third  District,  and  this  appeal  is  from  that 
judgment. 

The  Appellate  Court,  in  its  opinion  filed  on  rendering  that 
judgment,  holds,  first,  that  the  directors  of  a  bank  are 
trustees  for  depositors  as  well  as  for  stockholders ;  second, 
that  they  are  bound  to  the  observance  of  ordinar}r  care  and 
diligence,  and  are  hence  liable  for  injuries  resulting  from 
their  non-observance  ;  and  third,  that  the  present  appellants 
did  not  observe  that  degree  of  care  and  diligence,  and,  in 
consequence  thereof,   appellee  sustained   the   damages   for 


200      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.      [CH.  VIIL 

which  the  judgment  was  rendered.     Delano  et  al.  v.  Case, 
17  Bradw.  531. 

The  last  proposition  we  are  relieved  from  inquiring  into, 
since  there  was  evidence  tending  (though,  it  may  be,  but 
slightly)  to  sustain  it. 

The  propositions  of  law,  as  above  stated,  are,  in  our 
opinions,  free  of  objection  and  sustained  by  authority. 
Percy  et  al.  v.  Millandon,  3  La.  568 ;  United  Society  of 
Shakers  v.  Underwood,  9  Bush,  609  ;  Morse  on  Banks  and 
Banking  (2d  ed.),  133  ;  Thompson  on  Liability  of  Officers 
and  Agents,  395;  Shea  v.  Mabry,  1  Lea  (Tenn.),  319; 
Hodges  v.  New  England  Screw  Co.,  1  It.  I.  312  ;  Wharton 
on  Negligence,  sec.  510. 

The  judgment  is  affirmed. 

Judgment  affirmed. 


97.]     ISHAM,  Trustee,  v.  POST,  Administratrix. 
141  New  York,  100.  — 1894. 

Action  to  recover  $25,000  placed  in  defendant's  hands  by 
plaintiff  to  be  loaned.  Judgment  for  plaintiff.  Defendant 
appeals. 

Finch,  J.  The  relation  between  the  parties  to  this  con- 
troversy must  be  regarded  as  that  of  principal  and  agent. 
Post  was  a  banker,  —  not  a  member  of  the  Stock  Exchange, 
and  so  bound  bj-  its  rules,  but  familiar  with  its  customs  and 
usages,  and  controlled  by  them  to  some  extent  whenever 
dealing  with  stocks  in  the  Wall  Street  market.  He  held  him- 
self out  to  the  business  world  in  that  character.  By  his 
circulars  he  advertised  himself  as  dealing  in  "  choice  stocks," 
and  promised  his  customers  "  careful  attention"  in  all  their 
financial  transactions.  Those  who  dealt  with  him  contracted 
for,  and  had  a  right  to  expect,  a  degree  of  care  commensurate 
with  the  importance  and  risks  of  the  business  to  be  done,  and 
a  skill  and  capacity  adequate  to  its  performance.     That  care 


§  97.]  ISHAM  V.  POST.  201 

and  skill  is  such  as  should  characterize  a  banker  operating  for 
others  in  a  financial  center,  and  different  in  kind  from  the 
ordinary  diligence  and  capacity  of  the  ordinary  citizen.  The 
banker  is  employed  exactly  for  that  reason.  Without  it  there 
might  cease  to  be  motives  for  employing  him  at  all. 

Isbam  was  the  trustee  of  an  express  trust,  but  in  this  dis- 
pute must  be  regarded  simply  as  an  individual,  and  without 
reference  to  his  trust  character ;  for  the  trial  court  has  found 
as  a  fact  that,  in  employing  the  banker  to  loan  for  him 
$25,000,  he  gave  no  notice  of  the  trust  character  attaching  to 
the  money,  contracted  apparently  for  himself,  and  left  Post 
to  believe,  and  be  justified  in  believing,  that  the  money  was 
his  own.  The  evidence  on  the  subject  admits  of  some  differ- 
ence of  opinion,  but  on  this  appeal  the  finding  must  control. 

In  the  same  way  the  question  whether  Post's  services  in 
making  the  loan  were  or  were  not  to  be  gratuitous  must  be 
deemed  settled.  The  finding  is  that  those  services  were  to 
be  without  compensation ;  and  on  that  ground  the  appellant 
claims  that  Post  was  a  gratuitous  mandatary,  and  liable  only 
for  gross  negligence.  But,  while  no  compensation  as  such 
was  to  be  paid,  it  does  not  follow  that  the  banker  was  freed 
from  the  obligation  of  such  diligence  as  he  had  promised  to 
those  who  dealt  with  him,  or  was  at  liberty  to  withhold  from 
his  agency  the  exercise  of  the  skill  and  knowledge  which  he 
held  himself  out  to  possess.  Nothing  in  general  is  more  un- 
satisfactory than  attempts  to  define  and  formulate  the  different 
degrees  of  negligence ;  but  even  where  the  neglect  which 
charges  the  mandatary  is  described  as"  gross,"  it  is  still  true 
that  if  his  situation  or  emplo3'inent  implies  ordinary  skill  or 
knowledge  adequate  to  the  undertaking,  he  will  be  responsible 
for  am-  losses  or  injuries  resulting  from  the  want  of  the  exer- 
cise of  such  skill  or  knowledge.  Story  on  Bailments,  §  182a ; 
Shiells  v.  Blackbume,  1  H.  Black.  158 ;  Foster  v.  Essex 
Bank,  17  Mass.  479;  First  Nat.  Bank  v.  Ocean  Nat. 
Bank,  60  N.Y.  278.  In  the  latter  case  it  was  said  that 
ordinary  care  as  well  as  gross  negligence,  the  one  being  in 
contrast  with  the  other,  must  be  graded  by  the  nature  and 


202      OBLIGATIONS  OF  AGENT  TO  PRINCIPAL.     [CH.  Vm. 

value  of  the  property,  and  the  risks  to  which  it  is  exposed. 
Post,  therefore,  was  required  to  exercise  the  skill  and  knowl- 
edge of  a  banker  engaged  in  loaning  money  for  himself  and 
for  his  customers,  because  of  the  peculiar  character  and  scope 
of  his  agencj",  because  of  his  promise  of  careful  attention,  and 
because  the  contract  was  made  in  reliance  upon  his  business 
character  and  skill. 

We  should  next  consider  upon  whom  rested  the  burden  of 
proof.  The  plaintiff  alleged  and  proved  that  he  put  into 
Post's  hands,  as  his  banker  and  agent,  to  be  loaned  upon 
demand  at  the  high  rates  of  interest  prevailing,  and  in  the 
mode  approved  by  custom  and  usage,  the  sum  of  $25,000, 
which  sum  Post  had  not  returned,  but  refused  to  return  upon 
proper  demand,  and  so  had  converted  the  same  to  his  own 
use.  That  made  out  plaintiff's  case.  Judgment  for  him 
must  necessarily  follow,  unless  Post,  in  answer,  has  estab- 
lished an  affirmative  defence.  That  which  he  pleaded  and 
sought  to  prove  was  that  the  money  was  lost  without  his  fault 
and  through  an  event  for  which  he  was  altogether  blameless. 
In  other  words,  he  was  bound  to  show  that  he  did  his  duty 
fully  and  faithfully,  and  without  negligence  or  misconduct,  so 
that  the  resultant  loss  was  not  his,  but  must  justly  fall  upon 
the  plaintiff.  Marvin  v.  Brooks,  94  N.  Y.  71 ;  Ouderkirk  v. 
C.  N.  Bank,  119  Id.  263.  With  that  burden  resting  upon 
him,  we  must  examine  his  defence  and  the  evidence  given  in 
its  support,  and  determine  whether  or  not  it  is  our  duty  to 
sustain  the  adverse  conclusion,  to  reverse  which  he  brings 
this  appeal. 

(The  court  then  decides  that  the  trial  court  erred  in  exclud- 
ing certain  evidence  offered  by  the  defendant,  and  on  this 
ground  reverses  the  judgment.) 

Judgment  reversed. 


PART   III. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN 
THE  PRINCIPAL  AND  THIRD  PARTD3S. 


CHAPTER  IX. 

CONTRACT  OF  AGENT  IN  BEHALF  OF  A  DISCLOSED 
PRINCIPAL. 

1.    Contracts  apparently  authorized. 

§  103.]  HUNTLEY  v.  MATHIAS  et  al. 

90  North  Carolina,  101.  — 1884. 

Action  for  damages  to  a  horse.  Judgment  for  plaintiff. 
Defendant  corporation  appeals. 

Mathias  was  the  agent  of  defendant  corporation.  As  such 
agent  he  was  engaged  in  travelling  about  the  country  selling 
steam-engines.  While  so  engaged  he  hired  a  horse  of  plain- 
tiff, and  overdrove  and  injured  it.  Defendant  corporation 
contends  that  there  was  no  proof  that  Mathias  had  authority 
from  it  to  hire  the  horse. 

Merrimon,  J.  In  the  absence  of  any  written  instrument, 
agencies  in  many  cases  arise  from  verbal  authorizations,  from 
implications,  from  the  nature  of  the  business  to  be  done,  or 
from  the  general  usage  of  trade  and  commerce. 

It  is  a  general  principle,  applicable  in  all  such  cases, 
whether  the  agency  be  general  or  special,  unless  the  inference 
is  expressly  negatived  by  some  fact  or  circumstance,  that  it 
includes  the  authority  to  employ  all  the  usual  modes  and 
means  of  accomplishing  the  purposes  and  ends  of  the  agency, 
and  a  slight  deviation  by  the  agent  from  the  course  of  his 


204        CONTRACT  FOE  DISCLOSED  PRINCIPAL.      [CH.  IX. 

duty  will  not  vitiate  his  act,  if  this  be  immaterial  or  circum- 
stantial only,  and  does  not,  in  substance,  exceed  his  power 
and  duty.  Such  an  agency  carries  with  and  includes  in  it,  as 
an  incident,  all  the  powers  which  are  necessary,  proper,  usual, 
and  reasonable,  as  means  to  effectuate  the  purposes  for  which 
it  was  created,  and  it  makes  no  difference,  whether  the  author- 
ity is  general  or  special,  expressed  or  implied,  it  embraces  all 
the  appropriate  means  to  accomplish  the  end  to  be  attained. 

The  nature  and  extent  of  the  incidental  authority,  in 
such  cases,  turn  oftentimes  upon  very  nice  considerations 
of  actual  usage,  or  implications  of  law,  and  it  is  sometimes 
difficult  to  apply  the  true  rule.  Incidental  powers  are  gen- 
erally derived  from  the  nature  and  purposes  of  the  particular 
agenc}',  or  from  the  particular  business  or  employment,  or 
from  the  character  of  the  agent  himself.  Sometimes  the 
powers  are  determined  bj'  mere  inference  of  law ;  in  other 
cases  by  matters  of  fact ;  in  others  by  inference  of  fact ; 
and  in  others  still,  to  determine  them  becomes  a  question 
of  mixed  law  and  fact.  Story  on  Agency,  §§  85,  97,  100; 
Gilbraith  v.  Lineberger,  69  N.  C.  145  ;  Katzenstein  v.  Rail- 
road, 84  N.  C.  688  ;  Bank  v.  Bank,  75  N.  C.  534 ;  Williams 
V.  Windley,  86  N.  C.  107 ;  1  Wait,  Act.  &  Def.  221,  230. 

In  the  case  before  us  the  allegations  of  the  complaint  are 
very  general  and  the  evidence  is  meagre,  but  applying  the 
rules  of  law  above  stated  to  the  whole  case,  we  think  the 
court  properly  held  that  there  was  evidence  to  go  to  the  jury 
in  respect  to  the  authority  of  the  agent  to  hire  the  horse. 

It  is  alleged  in  the  complaint  that  Mathias  was  the  agent 
of  the  defendant  corporation,  and  this  is  admitted  in  the 
answer,  and  the  evidence  went  to  show  that  the  object  of  the 
agency  was,  that  the  agent  should  travel  about  the  country 
from  place  to  place,  and  sell  steam-engines  for  his  principal. 
Now,  common  experience  and  observation  show  that,  gen- 
erally, a  man,  whether  as  principal  or  agent,  going  about  the 
country  from  place  to  place,  and  in  various  directions,  to  sell 
steam-engines,  or  merchandise  of  any  kind  that  people  gener- 
ally purchase,  does  not  go  on  foot,  but  on  railroads  when  he 


§  103.]  HUNTLEY  V.  MATHIAS.  205 

can,  on  horseback,  or  in  light,  convenient  vehicles.  This  is 
done  almost  uniformly,  with  a  view  to  expedition  as  well  as 
the  reasonable  comfort  of  the  person  travelling.  In  the  general 
order  of  things  this  is  done,  and  it  is  reasonable  and  proper 
that  it  should  be.  And  ordinarily,  where  an  agent  is  sent  out 
on  such  service,  his  principal  furnishes  the  means  of  trans- 
portation. This  is  not  perhaps  uniformly,  but  it  is  generally 
so,  and  if  there  is  not  a  legal  presumption  of  authority  in  the 
agent  to  hire  a  horse  or  vehicle  for  the  purpose  of  getting 
from  place  to  place,  the  fact  certainly  raises  the  ground  for  an 
inference  of  the  fact  to  that  effect,  to  be  drawn  by  the  jur}\ 
The  nature  of  the  agency  in  this  case  rendered  it  necessary  that 
the  agent  should,  from  time  to  time,  have  a  horse  to  enable 
him  to  get  from  one  place  to  another,  and  this  gives  rise  to  the 
inference  that  his  employer  gave  him  authority  to  hire  one. 

The  corporation  defendant  sent  its  agent  out  to  travel  from 
place  to  place  to  sell  its  goods,  and  it  gave  him  credit  as  a 
trustworthy  man  in  and  about  the  business  of  the  agenc}\ 
In  view  of  the  habits  of  men,  the  customary  course  of  busi- 
ness, especially  the  custom  in  such  agencies  as  that  under 
consideration,  there  arose  the  ground  for  an  inference  that 
the  jury  might  properly  draw,  not  conclusive  in  itself,  but  to 
be  made  and  weighed  bj-  the  jury,  to  the  effect  that  the  agent 
Mathias  had  authority  to  hire  the  horse  for  the  purpose  of 
his  agency.  Katzenstein  v.  Railroad,  supra  ;  Bank  v.  Banlc, 
supra  ;  Bentleyv.  Doggett,  51  Wis.  2*24  ;  37  Am.  Rep.  827. 

That  the  principal  is  liable  to  third  persons  for  torts,  de- 
ceits, .  frauds,  malfeasance  and  nonfeasance,  and  omissions 
of  duty  of  his  agent  in  the  course  of  his  employment,  cannot 
be  questioned,  even  though  the  principal  did  not  authorize, 
justify,  or  participate  in,  or  know  of  such  misconduct.  Story 
on  Agency,  452  et  seq. ;  Jones  v.  Glass,  13  Ired.  305  ;  Cox 
v.  Hoffman,  4  Dev.  &  Bat.  180. 

The  evidence  in  this  case  tended  to  show,  and  the  jury 
found,  that  the  agent  hired  the  horse  in  the  course  of  the 
business  of  his  agency,  and  for  the  benefit  of  his  principal, 
and  while  he  had  possession  of,  and  used  the  horse,  in  the 


206        CONTRACT  FOR  DISCLOSED  PRINCIPAL.      [CH.  IX. 

course  of  his  business,  he  negligently  and  carelessly  drove 
him  too  rapidly,  or  otherwise  maltreated  him,  whereby  he 
was  seriously  injured,  to  the  damage  of  the  plaintiff.  The 
court  fairly  left  the  question  of  authority  in  the  agent  to  hire 
the  horse,  and  the  character  and  extent  of  the  injur}'  to  him, 
to  the  jury,  and  we  cannot  see  that  the  defendant  has  any 
just  ground  of  complaint. 

There  is  no  error,  and  the  judgment  must  be  affirmed. 

Affirmed. 


103.]  BRONSON'S  EXECUTOR  v.  CHAPPELL. 
12  Wallace  (U.  S.),  681.  —  1870. 
[Reported  herein  at  p.  101.] 


§103.]  JOHNSON  v.  HURLEY. 

115  Missouri,  513.  — 1893. 
[Reported  herein  at  p.  105.] 


§  104.]        HOWELL  et  al.  v.  GRAFF  et  al. 

25  Nebraska,  130.  —  1888. 

Maxwell,  J.  On  the  thirtieth  day  of  September,  1886, 
the  plaintiffs  filed  a  petition  in  the  district  court  of  Douglas 
County  against  the  defendants,  to  recover  the  sum  of 
$1,419.30,  with  interest,  for  breach  of  contract,  for  that  on 
the  fourth  day  of  August,  1886,  the  defendants  entered  into 
a  written  contract  of  sale  with  plaintiffs,  and  on  that  da}7 
sold  to  the  plaintiffs  a  certain  lot  of  dimension  timber  for 
immediate  shipment,  delivered  at  Atchison,  Kansas,  all  white 
pine,  at  $16.50  per  M.,  terms  90  days.  The  contract  of  sale 
was  in  writing. 


§  104.]  HOWELL  V.   GRAFF.  207 

The  defendants  failed  to  deliver  any  part  of  the  lumber, 
and  this  suit  was  brought  to  recover  the  difference  between 
the  contract  price,  to  wit,  $16.50  per  M.,  and  the  market 
price,  the  difference  being  $1,419.30. 

The  defendants,  in  their  answer,  set  up  that  their  agent 
Fyfe,  who  made  this  contract,  was,  on  the  fourth  day  of  August, 
1886,  employed  by  the  defendants  to  solicit  orders  for  cer- 
tain kinds  of  lumber,  certain  specified  kinds  and  grades  only, 
and  that  he  had  special  and  specific  orders  and  instructions 
not  to  solicit  orders  for  lumber  of  any  kind  or  grade  from 
plaintiffs,  or  to  have  any  dealings  with  them  whatsoever,  and 
that  he  had  no  authority  to  receive  or  accept  orders  from 
plaintiffs,  or  to  enter  into  an}*  contract  with  them,  and  set- 
ting out  that  the  prices  in  said  contract  were  below  the 
market  prices  and  values  of  lumber  at  the  time,  and  also 
below  the  prices  at  which  Fyfe  was  instructed  to  take  and 
solicit  orders ;  and  further  alleging  that  the  contract  was  made 
by  mistake,  and  that  after  it  was  made  said  agent  notified  the 
plaintiffs,  and  that  the  same  was  cancelled  and  annulled. 

On  the  trial  of  the  cause  in  the  court  below  a  jury  was 
waived,  and  the  cause  submitted  to  the  court,  which  found  for 
the  defendants,  and  dismissed  the  action. 

The  principal  question  in  the  case  is  the  apparent  authority 
of  the  agent,  Mr.  Fyfe,  to  make  the  contract  sued  on.  The 
testimony  fails  to  show  such  apparent  authority,  while  it  does 
tend  to  show  that  orders  were  taken  subject  to  approval  by 
his  principal.  It  appears  that  on  the  fifth  day  of  August, 
1886,  the  order  was  taken,  Fyfe  estimating  the  weight  per 
1,000  feet  of  green  pine  lumber  at  2,800  lbs.  In  the  evening, 
however,  in  revising  his  figures,  he  discovered  that  he  had 
made  a  mistake  of  1,000  lbs.,  the  estimate  should  have  been 
3,800  lbs.  He  then  telegraphed  his  principal  to  know  if  they 
would  fill  an  order  of  the  kind  specified  at  $16.50  per  M.,  to 
which  they  answered,  in  substance,  no,  but  at  $19.50  per  M. 
Fyfe  claims  to  have  notified  the  plaintiffs  on  the  next  day 
of  this  refusal.  This  the  plaintiffs  deny.  There  is  consider- 
able dispute  in  the  testimony  as  to  what  took  place  between 


208        CONTRACT  FOR   DISCLOSED  PRINCIPAL.      [CH.  IX. 

the  parties  afterwards,  but  that  matter  does  not  seem  to  be 
material  in  the  case.  The  whole  question  turns  upon  the 
apparent  authority  of  Fyfe  to  make  an  absolute  contract  and 
gives  credit  for  90  days,  and  the  testimony  fails  to  clearly 
establish  such  apparent  authority.  The  rule  is,  that  if  a 
special  agent  exercise  the  power  exhibited  to  the  public,  the 
principal  will  be  bound,  even  if  the  agent  has  received  private 
instructions  which  limit  his  special  authority.  Wilson  v. 
Beardsley,  20  Neb.  449.  The  proof,  however,  fails  to  show 
that  Fyfe  had  apparent  authority  from  his  principal  to  make 
an  absolute  sale  upon  the  terms  proposed. 

Some  objection  is  made  to  proof  of  usage,  but  both  parties 
resorted  to  this  proof  to  sustain  the  issues  on  their  respective 
parts,  and  cannot  now  complain. 

There  is  no  error  apparent  in  the  record,  and  the  judgment 
is  affirmed. 

Judgment  affirmed. 


§§106,111.]     DAYLIGHT  BURNER  CO.  v.  ODLIN. 
51  New  Hampshire,  56.  —  1871. 

Assumpsit  against  Odlin  as  a  common  carrier  for  delivering 
goods  marked  "CO.  D."  without  receiving  the  price.  Ver- 
dict for  defendant,  and  plaintiff  moved  to  set  it  aside. 

The  goods  were  addressed  to  one  Beny,  to  whom  they  had 
been  sold  by  Moore,  an  agent  of  plaintiff.  Berry  refused  to 
pay  for  the  goods  on  the  ground  that  he  had  purchased  them 
of  Moore  on  credit.  Defendant  refused  to  deliver  them,  but 
subsequently  Berry  presented  an  order  from  Moore  to  defend- 
ant directing  defendant  to  deliver  them  "  without  C.  0.  D.," 
and  thereupon  defendant  delivered  them  without  receiving 
pa3Tment. 

Moore  travelled  to  sell  his  own  goods,  but  incidentally 
sold  goods  for  plaintiff.  He  had  no  actual  authority  to  seil 
on  credit. 


§§  106,  111.]      DAYLIGHT  BURNER  CO.   V.   ODLIN.        209 

Bellows,  C.  J.  From  the  uncontradicted  testimony  of  the 
plaintiff  and  the  finding  of  the  jury,  it  may  be  assumed  that 
Moore  was  clothed  by  the  plaintiff  with  an  apparent  author- 
ity, like  that  of  a  factor,  to  sell  all  the  goods  of  the  plaintiff 
he  could  sell  within  his  business  circuit,  on  a  commission  of 
ten  per  cent. 

As  incident  to  that  general  authority,  he  had  power  to  fix 
the  terms  of  sale,  including  the  time,  place,  and  mode  of 
deliver}',  and  the  price  of  the  goods,  and  the  time  and  mode 
of  payment,  and  to  receive  payment  of  the  price,  subject 
of  course  to  be  controlled  by  proof  of  the  mercantile  usage 
in  such  trade  or  business. 

There  is  some  conflict  in  the  adjudged  cases  upon  the  ques- 
tion of  the  authority  of  a  factor  to  sell  on  credit,  but  we  think 
the  weight  of  modern  authority  is  in  favor  of  the  position 
that  he  may  sell  on  credit,  unless  a  contrary  usage  is  shown. 
Goodenow  v.  Tyler,  7  Mass.  36  ;  Hapgood  v.  Batcheller,  4 
Met.  573  ;  Greely  v.  Bartlett,  1  Greenl.  172  ;  Van  Alen  v. 
Vanderpool,  6  Johns.  70 ;  Robertson  v.  Livingston,  5  Cow. 
473  ;  Leland  v.  Douglass,  1  Wend.  490 ;  and  see  1  Am. 
Leading  Cases,  4th  ed.,  662,  note,  where  it  is  said  that  it  is 
universally  established  as  the  law-merchant  that  a  factor  may 
sell  on  credit.  So  in  Laussatt  v.  Lippincott,  6  S.  &  R.  386, 
and  May  v.  Mitchell,  5  Humph.  365,  and  Story  on  Agency, 
sec.  209. 

The  same  views  are  recognized  in  Scott  v.  Surman,  Willes, 
406  ;  Russell  v.  Hankey,  6  T.  R.  12  ;  Haughtonx.  Mathews, 
3  B.  &  P.  489,  per  Chambre,  J. ;  3  Selw.  N.  P.  719. 

In  the  case  before  us,  Moore  stands  much  on  the  same 
footing  as  a  factor.  The  most  marked  distinction  is  that 
he  is  a  travelling  merchant,  and  did  not  apparently  have  his 
principal's  goods  with  him  ;  but  this,  we  think,  cannot  affect 
the  rule. 

The  reason  of  that  rule  in  the  case  of  factors  is  that  it  is 
found,  by  experience  and  repeated  proofs  in  courts  of  justice, 
that  it  is  ordinarily  the  usage  of  factors  to  sell  on  credit ;  and 
the  same  reason  will  apply  in  this  case. 

14 


210 


CONTRACT  FOR  DISCLOSED  PRINCDPAL.      [CH.  IX. 


We  have  a  case,  then,  where  the  agent  was  apparently 
clothed  with  the  authority  to  sell  the  plaintiffs  goods,  with- 
out limitation  as  to  the  quantity,  and  on  commission,  for 
cash  or  on  credit  as  he  might  think  proper ;  and  this  being 
so,  Moore  must  be  regarded,  in  respect  to  third  persons,  as 
the  plaintiff's  general  agent,  whose  authority  would  not  be 
limited  by  instructions  not  brought  to  the  notice  of  such 
third  persons.  Backman  v.  Charlestown,  42  N.  H.  125 
and  cases  cited. 

As  Moore,  then,  in  respect  to  third  persons,  had  the  power 
to  sell  on  credit,  the  authority  to  control  the  delivery  of  the 
goods  so  sold  and  sent  to  his  order,  for  the  purpose  of  mak- 
ing it  conform  to  the  contract  of  sale,  would  necessarily  come 
within  the  scope  of  his  agency  ;  and  we  think  his  order  to  the 
defendant  would  justify  a  delivery  of  the  goods  without  pa}-- 
ment,  unless  he  had  notice  of  the  agent's  want  of  authority. 
As  to  him  the  agent's  apparent  authority  was  real  authority. 
The  marking  of  the  package  by  another  agent  of  the  plain- 
tiff, to  the  effect  that  cash  was  required  on  delivery,  was  not 
in  law  notice  of  such  want  of  authority,  although  it  might  be 
sufficient  to  put  the  defendant  upon  inquiry.    That,  however, 
was  properly  left  to  the  jury,  and  they  have  found  it  not  to 
be  sufficient  for  that  purpose.     The  marking  of  the  package 
in  that  wa}r  does  not  necessarily  imply  that  the  agent  had  no 
authority  to  sell  on  credit,  but  it  might  indicate  merely  that 
the  person  so  marking  it  supposed  the  sale  to  be  for  cash. 
And  it  might  well  be  considered  to  come  within  the  scope  of 
Moore's  agency  to  make  the  delivery  conform  to  the  contract 
of  sale. 

As  the  defendant,  therefore,  is  found  to  have  had  no  notice 
of  any  want  of  authority  in  Moore,  and  was  not  put  upon  in- 
quiry, there  must  be  Judgment  on  the  verdict. 


§  106.]        BYRNE  V.    MA.SSASOIT  PACKING  CO.  211 

§  106.]    BYRNE  v.  MASSASOIT  PACKING  CO. 

137  Massachusetts,  313.  —  1884. 

Contract,  for  breach  of  written  agreement.  Verdict  for 
plaintiff.     Defendant  alleged  exceptions. 

Defendant's  agent  sold  plaintiff  3,000  barrels  of  mackerel. 
Defendant  refused  to  deliver  on  the  ground  that  the  agent 
agreed  to  sell  at  not  less  than  market  price  and  to  respon- 
sible parties  aloue,  whereas  this  sale  was  at  less  than  market 
price  and  to  an  irresponsible  part)'.  Defendant  offered  to 
prove  that  plaintiff  was  an  irresponsible  party,  and  also  offered 
to  prove  a  custom  among  Boston  fish-dealers  to  accept  or 
reject  contracts  of  agents.  Both  offers  were  rejected  and 
the  evidence  excluded. 

W.  Allen,  J.  The  authority  of  Brookman  as  selling  agent 
of  the  defendant  was  not  limited  by  the  provisions  in  the  con- 
tract between  them,  by  which  he  guaranteed  that  his  sales 
should  not  be  less  than  $200,000,  and  that  all  sales  should 
be  to  good  and  responsible  parties,  and  at  not  less  than  mar- 
ket prices.  This  was  an  arrangement  between  the  principal 
and  agent  which  could  not  affect,  and  plainly  was  not  in- 
tended to  affect,  third  parties.  The  evidence  offered  to  prove 
that  the  agent  had  violated  his  agreements  to  sell  to  good 
and  responsible  parties,  in  making  the  sale  to  the  plaintiff, 
was  therefore  immaterial,  and  was  property  excluded,  even 
if  it  was  competent  evidence  to  prove  the  fact  for  which  it 
was  offered. 

The  evidence  to  prove  a  custom  among  the  fish-dealers  in 
Boston  to  accept  or  reject  contracts  of  selling  agents,  not 
known  to  the  plaintiff,  nor  in  New  Orleans,  where  the  con- 
tract was  made,  was  properly  excluded. 

Exceptions  overruled. 


212       CONTRACT  FOR  DISCLOSED  PRINCDPAL.      [CH.  IX. 


§  106.]         BENTLEY  v.   DOGGETT  et  al. 
51  Wisconsin,  224.  — 1881. 

Action  to  recover  for  livery  furnished  by  plaintiff  to  one 
Otis,  an  agent  of  defendants.  Judgment  for  plaintiff.  De- 
fendauts  appeal. 

Defendants  offered  to  prove  that  they  had  furnished  Otis 
with  money  to  cover  all  expenses,  that  he  had  no  authority 
to  pledge  their  credit,  that  they  had  subsequently  settled  with 
Otis  and  allowed  him  the  amount  of  plaintiff's  bill,  and  that 
there  was  a  general  custom  in  Chicago  (where  defendants 
did  business)  to  furnish  travelling  salesmen  with  money  for 
all  expenses,  and  to  give  such  salesmen  no  authority  to 
pledge  the  credit  of  their  principals.  This  evidence  was 
excluded. 

Taylor,  J.  It  is  clearly  shown  by  the  evidence  that  it 
was  not  only  convenient  but  necessary  for  the  agent,  Otis,  to 
have  the  use  of  horses  and  carriages  in  order  to  transact  the 
business  he  was  employed  to  transact ;  and  the  only  question 
is,  whether  he  could  bind  his  principals  by  hiring  them  upon 
their  credit.  Otis  was  the  agent  of  the  defendants  for  the 
purpose  of  travelling  about  the  country  with  samples  of  their 
merchandise,  contained  in  trunks,  which  rendered  it  neces- 
sary to  have  a  team  and  carriage  to  transport  him  and  his 
samples  from  place  to  place,  with  full  authorit}'  to  sell  their 
merchandise  by  sample  to  customers,  and  direct  the  same  to 
be  delivered  according  to  his  orders.  The  defendants  not 
having  furnished  their  agent  the  necessarj-  teams  and  car- 
riages for  transportation,  he  clearly  had  the  right  to  hire  the 
same  and  pa}7  their  hire  out  of  the  funds  in  his  hands  be- 
longing to  them.  This  is  admitted  b}*  all  parties.  The  real 
question  is,  can  the  agent,  having  the  mone}'  of  his  principals 
in  his  possession  for  the  purpose  of  paying  such  hire,  b}* 
neglecting  to  pay  for  it,  charge  them  with  the  payment  to  the 
party  furnishing  the  same,  such  party  being  ignorant  at  the 


§  106.]         BENTLEY  V.   DOGGETT.  213 

time  of  furnishing  the  same  that  the  agent  was  furnished  by 
his  principals  with  monej'  and  forbidden  to  pledge  their  credit 
for  the  same  ? 

There  can  be  no  question  that,  from  the  nature  of  the  busi- 
ness required  to  be  done  by  their  agent,  the  defendants  held 
out  to  those  who  might  have  occasion  to  deal  with  him,  that 
he  had  the  right  to  contract  for  the  use  of  teams  and  car- 
riages necessary  and  convenient  for  doing  such  business,  in 
the  name  of  his  principals,  if  he  saw  fit,  in  the  way  such 
service  is  usually  contracted  for ;  and  we  maj*,  perhaps,  take 
judicial  notice  that  such  service  is  usually  contracted  for, 
payment  to  be  made  after  the  service  is  performed.  It  would 
seem  to  follow  that,  as  the  agent  had  the  power  to  bind  his 
principals  by  a  contract  for  such  service,  to  be  paid  for  in  the 
usual  way,  if  he  neglects  or  refuses  to  pay  for  the  same  after 
the  service  is  performed,  the  principals  must  pay.  The  fault 
of  the  agent  in  not  paying  out  of  the  money  of  his  principals 
in  his  hands  cannot  deprive  the  party  furnishing  the  service 
of  the  right  to  enforce  the  contract  against  them,  he  being 
ignorant  of  the  restricted  authority  of  the  agent.  If  the 
party  furnishing  the  service  knew  that  the  agent  had  been 
furnished  by  his  principal  with  the  mone}'  to  pay  for  the 
service,  and  had  been  forbidden  to  pledge  the  credit  of  his 
principals  for  such  service,  he  would  be  in  a  different  position. 
Under  such  circumstances,  if  he  furnished  the  service  to  the 
agent,  he  would  be  held  to  have  furnished  it  upon  the  sole 
credit  of  the  agent,  and  he  would  be  compelled  to  look  to  the 
agent  alone  for  his  pay.  We  think  the  rule  above  stated  as  gov- 
erning the  case  is  fully  sustained  by  the  fundamental  principles 
of  law  which  govern  and  limit  the  powers  of  agents  to  bind  their 
principals  when  dealing  with  third  persons.  Judge  Story,  in 
his  work  on  Agenc}-,  §  127,  says :  "  The  principal  is  bound  by 
all  acts  of  his  agent  within  the  scope  of  the  authority  which 
he  holds  him  out  to  the  world  to  possess,  although  he  may 
have  given  him  more  limited  private  instructions  unknown  to 
the  persons  dealing  with  him."  In  section  133,  he  says  :  "  So 
far  as  an  agent,  whether  he  is  a  general  or  special  agent,  is  in 


214        CONTRACT  FOR  DISCLOSED  PRINCIPAL.      [CH.  LX. 

any  case  held  out  to  the  public  at  large,  or  to  third  persons 
dealing  with  him,  as  competent  to  contract  for  and  bind  the 
principal,  the  latter  will  be  bound  bj*  the  acts  of  the  agent, 
notwithstanding  he  may  have  deviated  from  his  secret  in- 
structions." And  again,  in  section  73,  in  speaking  of  the 
power  of  an  agent  acting  under  a  written  authority,  he  says : 
"  In  each  case  the  agent  is  apparently  clothed  with  full 
authority  to  use  all  such  usual  and  appropriate  means,  unless 
upon  the  face  of  the  instrument  a  more  restrictive  authority 
is  given,  or  must  be  inferred  to  exist.  In  each  case,  there- 
fore, as  to  third  persons  innocently  dealing  with  his  agent, 
the  principal  ought  equally  to  be  bound  b}r  acts  of  the  agent 
executing  such  authority  b}r  an}*  of  those  means,  although  he 
may  have  given  to  the  agent  separate  private  and  secret  in- 
structions of  a  more  limited  nature,  or  the  agent  ma}'  be 
secretly  acting  in  violation  of  his  duty."  In  the  case  of 
Pickering  v.  Busk,  15  East,  38-43,  Lord  Ellenborough, 
speaking  of  the  power  of  an  agent  to  bind  his  principal,  says : 
"It  is  clear  that  he  may  bind  his  principal  within  the  limits 
of  the  authorit}-  with  which  he  has  been  apparently  clothed  by 
the  principal  in  respect  to  the  subject-matter ;  and  there 
would  be  no  safety  in  mercantile  transactions  if  he  could  not." 
These  general  principles  have  been  illustrated  and  applied  by 
this  and  other  courts  in  the  following  cases :  Young  v.  Wright, 
4  Wis.  144 ;  Whitney  v.  State  Bank,  7  Wis.  620 ;  Long  v. 
Fuller,  21  Wis.  121 ;  Houghton  v.  Bank,  26  Wis.  663  ;  Kas- 
$on  v.  Noltner,  43  Wis.  646  ;  Smith  v.  Tracy,  36  N.  Y. 
79  ;  Andrews  v.  Kneeland,  6  Cow.  354. 

In  this  view  of  the  case  it  was  immaterial  what  the  orders 
of  the  principal  were  to  the  agent,  or  that  he  furnished  him 
mone}'  to  pay  these  charges,  so  long  as  the  person  furnishing 
the  service  was  in  ignorance  of  such  facts.  In  order  to  re- 
lieve himself  from  liability,  the  principal  was  bound  to  show 
that  the  plaintiff  had  knowledge  of  the  restrictions  placed 
upon  his  agent,  or  that  the  custom  to  limit  the  powers  of 
agents  of  this  kind  was  so  universal  that  the  plaintiff  must 
be  presumed  to  have  knowledge  of  such  custom.    Under  the 


§§  106,  107,  112.]        HIGGESS  V.  MOORE.  215 

decisions  of  this  court,  the  custom  offered  to  be  proved  was  not 
sufficiently  universal  to  charge  the  plaintiff  with  notice 
thereof.  See  Scott  v.  Whitney,  41  Wis.  504,  and  the  cases 
cited  in  the  decision,  and  Hinton  v.  Coleman,  45  Wis.  1G5. 
And  there  being  no  proof  of  actual  notice  to  the  plaintiff,  the 
only  issue  left  in  the  case,  which  was  not  clearly  disposed  of 
in  favor  of  the  plaintiff  b}r  the  evidence,  was  submitted  to 
the  jurj',  viz.,  whether  the  credit  was,  in  fact,  given  by  the 
plaintiff  to  the  agent  or  to  the  firm.  The  jury  found  against 
the  defendants  upon  this  issue.  From  reading  the  evidence 
in  the  record,  I  should  have  been  better  pleased  with  a  dif- 
ferent verdict  upon  this  issue  ;  but  as  there  is  some  evidence 
to  support  the  verdict,  and  as  this  court  has  held  substan- 
tially in  Champion  v.  Doty,  31  Wis.  190,  that  charging  the 
service  in  the  plaintiff's  books  to  the  agent  is  not  conclusive 
that  the  credit  was  given  to  him,  but  might  be  explained,  it 
was  the  province  of  the  jury  to  say  whether  the  explana- 
tion given  by  the  plaintiff  was  reasonable  and  satisfactory. 
We  cannot,  therefore,  set  aside  the  verdict  as  against  the 
evidence. 

By  the  Court.    The  judgment  of  the  court  is  affirmed. 


§  106,  107, 112.]  HIGGINS  v.  MOORE. 
34  New  York,  417.—  1866. 

Action  for  the  price  of  a  cargo  of  rye  sold  and  delivered  by 
plaintiffs  to  defendant.  Defence,  payment  to  plaintiffs' 
agent  through  whom  defendant  purchased.  Judgment  for 
defendant.     Plaintiffs  appeal. 

The  sale  was  negotiated  bj7  a  broker  in  New  York,  plain- 
tiffs residing  in  Albany.  Defendant,  before  the  delivery  of 
the  grain,  knew  that  plaintiffs  were  the  principals.  The 
broker  never  had  possession  of  the  grain.  The  defendant 
relied  upon  a  usage  of  trade  in  New  York  which  allowed  such 
payments  to  a  broker  when  the  seller  resided  out  of  the  city 
of  New  York. 


216        CONTRACT  FOR  DISCLOSED  PRINCIPAL.      [CH.  LX. 

Peckham,  J.  The  judgment  was  sustained  in  the  superior 
court  mainly  on  the  ground  that  a  grain  broker,  who  had 
never  had  possession  of  the  rye  sold,  but  was  only  authorized 
to  contract  for  its  sale,  had  thereby  an  implied  authority  to 
receive  the  purchase  price.  The  court  was  not  satisfied  with 
the  finding  of  the  fact  by  the  referee  as  to  the  usage  of 
trade  which  allowed  a  payment  to  a  broker,  but  did  not  set 
it  aside.  I  agree  that  the  evidence  is  entirely  unsatisfactorj' 
to  establish  any  such  usage.  To  my  mind,  it  is  utterly 
insufficient.  This  court,  however,  has  no  authority  to  inter- 
fere with  this  judgment  on  that  ground.  The  fact,  as  found, 
is  conclusive  here. 

The  first  question  arising  here  is,  had  the  broker,  merely 
as  such,  authority  to  receive  payment?  I  think  he  had  not. 
In  Baring  v.  Corrie  (2  B.  &  Aid.  137),  Holroyd,  J.,  said, 
'  *  A  factor  who  has  the  possession  of  goods  differs  materially 
from  a  broker.  The  former  is  one  to  whom  goods  are  sent  or 
consigned.  He  not  only  has  the  possession,  but  generally  a 
special  property  in  them  ;  but  the  broker  has  not  the  posses- 
sion, and  so  the  vendee  cannot  be  deceived  by  that ;  besides 
employing  a  broker  to  sell  goods  does  not  authorize  him  to 
sell  in  his  own  name." 

In  that  case  it  was  held  that  the  purchaser  from  a  broker 
had  no  authority  to  set  off  a  debt  against  the  broker,  on  the 
ground  that  the  broker  had  no  authority  to  sell  in  his  own 
name.  Brokers  are  defined  to  be  "  those  who  make  con- 
tracts between  merchants  and  tradesmen,  in  matters  of 
money  and  merchandise,  for  which  the}'  have  a  fee."  1  Liv. 
on  Agency,  73,  ed.  of  1818. 

It  has  been  questioned  among  civilians,  says  Livermore, 
whether  an  authority  to  sell  or  let  includes  an  authority  to 
receive  the  price  or  not,  and  that  Pothier  says  this  power  is 
not  generally  included.  Id.  p.  74 ;  Pothier's  Traite  des 
Obligations,  477.  But,  that  in  some  cases  it  will  be  pre- 
sumed, as  if  goods  are  put  into  the  hands  of  public  brokers 
to  be  sold,  and  they  are  in  the  habit  of  receiving  the  price. 
Putting  the  goods  in  their  hands  implies  an  authority  to 


§§  106,  107,  112.]       HIGGINS   V.   MOORE.  217 

receive  payment  (2  Liv.  284,  285),  as  it  does  to  receive  pay- 
ment on  securities.     3  Chit.  Com.  Law,  207,  208. 

The  general  doctrine  is,  that  a  broker  employed  to  sell  has 
no  authority  as  such  to  receive  payment.  Russell  on  Factors 
and  Brokers,  48  Law  Lib.  68-110 ;  Mynn  v.  Joliffe,  1  Wood 
&  Rob.  326  ;  faring  v.  Corrie,  2  B.  &  Aid.  137.  Excep- 
tion is  made  to  this  general  rule  in  some  cases  where  the 
principal  is  not  disclosed.  Smith's  Mer.  L.  129,  bjr  Hoi.  & 
Gholson ;  see  also,  as  throwing  light  upon  this  question, 
though  not  directly  in  point,  Whitbeck  v.  Waltham,  1  Sol. 
157 ;  Morris  v.  Gleasby,  1  M.  &  S.  576.  Story  says,  an 
agent  to  conclude  a  contract  is  not,  of  course,  authorized 
to  receive  payment  thereunder.  Story  on  Agenc}*,  §  98,  and 
cases  there  cited. 

Where  the  person  contracting  for  the  sale  has  the  property 
in  his  possession,  and  delivers  it,  he  is  clothed  with  the 
indicia  of  authority  to  receive  payment,  especially  when 
the  owner  is  not  known.  Such  are  the  cases  referred  to  by 
the  court  below.  He  is  then  clothed  with  apparent  authority) 
and  that,  as  to  third  persons,  is  the  real  authority.  Capel  v. 
Thornton,  3  Car.  &  P.  352 ;  Pickering  v.  Busk,  15  East, 
38.  In  the  latter  case  the  property  had  been  put  into  the 
possession  of  the  broker  and  the  title  in  his  name.  "  The 
sale  was  made  by  a  person  who  had  all  the  indicia  of  prop- 
erty."    Ireland  v.  Thomson,  4  Com.  Bench  R.  149. 

Cross  v.  Hasking,  13  Vt  536.  In  this  case,  in  the  facts 
as  stated,  it  does  not  distinctly  appear ;  but  it  was  so  stated 
in  the  syllabus  of  the  case  by  the  reporter.  Hackney  v.  Jones, 
3  Humph.  612. 

In  the  case  at  bar,  however,  the  broker  never  had  posses; 
sion  of  the  rye,  and  never  delivered  it;  but  the  plaintiffs 
retained  possession  till  they  delivered  to  the  defendant,  and 
they  were  well  known  to  the  defendant ;  one  of  them  had 
taken  part  in  thp.  npgotjation  for  the  sale,  as  owner,  in  the 
city  of  New  York.  The  broker  was  simply  authorized  to 
make  a  contract  for  the  sale.  This  was  the  whole  of  his 
authority  in  reality,  and  he  had  no  other  or  further  apparent 
authority. 


218        CONTRACT  FOE  DISCLOSED  PEIXCDPAL.      [CH.  IX. 

Irrespective  of  the  usage  found  by  the  referee,  therefore, 
the  defendant  was  not  discharged  by  a  pa}rment  to  the 
broker. 

Does  that  usage  discharge  him?  In  other  words,  did  the 
usage  give  the  broker  an  authority  to  receive  payment  which 
otherwise  did  not  belong  to  him  ?  There  is  no  authority  in 
this  State  on  this  point,  and  none  in  principle,  I  think,  that 
sustains  the  affirmative  of  such  a  position. 

Mr.  Justice  Story,  after  referring  to  various  cases  of 
authority  in  agents  to  receive  payment  on  bonds,  etc.,  and 
whether  before  due  or  not,  and  to  other  cases,  adds:  "  But 
if  there  be  a  known  usage  of  trade,  or  course  of  business 
in  a  particular  employment,  or  habit  of  dealing  between  the 
parties,  extending  the  ordinary  reach  of  the  authority,  that 
may  well  be  held  to  give  full  validity  to  the  act.  Story  on 
Agency,  §  98.  In  another  section  he  says  :  M  Payments  made 
to  agents  are  good  in  all  cases  where  the  agent  is  authorized 
to  receive  them,  either  by  express  authorit}'  or  by  that 
resulting  from  the  usage  of  trade,  or  from  the  particular 
dealings  between  the  parties."  Id.  §  249.  The  authorities 
referred  to  are,  2  B.  &  Aid.  137;  1  East,  36;  and  1  M.  & 
Sel.  576,  579,  besides  writers  on  agency. 

Baring  v.  Corrie  (2  B.  &  Aid.  137)  simply  holds,  that 
where  the  broker  sells  without  disclosing  his  principal,  he 
acts  beyond  his  authority,  and  the  buyer  cannot  set  off  a 
debt  against  the  broker  in  answer  to  an  action  for  the  goods. 

In  Foveus  v.  Bennet  (11  Cow.  86),  it  is  true  that  Lord 
Ellenborough  referred  the  case  to  a  jurj'  to  find  whether  a 
payment  made  to  a  broker  had  beeu  made  according  to  the 
usage  of  trade.  They  found  it  had  been.  It  was  also  re- 
ferred to  the  jury  to  find  what  the  words  (in  the  bought  and 
sold  note  given  to  each  party)  meant  of  "  payment  in  a 
month,  money."  They  found  those  words  meant  "  payment 
at  an}'  time  within  a  month." 

In  that  case  the  brokers  were  entitled  to  receive  payment, 
as  they  themselves  made  the  delivery  of  the  property,  and 
were,  therefore,  intrusted  with  its  possession.    That  con- 


§§  106,  107,  112.]       HIGGINS  V.  MOORE.  219 

fessedly  gave  them  the  right  to  receive  payment.  They  were 
then  factors.  The  question  litigated  there  was,  whether  the 
broker  had  the  right  to  receive  the  payment  before  the  expi- 
ration of  the  month,  not  whether  they  had  the  right  to 
receive  it  at  all.  The  interpretation  of  the  words  in  the 
notes  settled  that,  —  a  very  proper  office  of  usage.  Morris  v. 
Cleasby  (1  M.  &  S.  576)  simply  decides  that,  after  the  prin- 
cipal is  disclosed,  a  purchaser  has  no  right  to  pay  a  factor  for 
the  goods. 

We  are  referred,  by  the  counsel  for  the  respondent,  to 
Campbell  v.  Hassell  (1  Stark.  233),  where  no  question  of 
usage  of  trade  arose,  except  when  the  defendant  offered  to 
show  "  that,  by  usage  of  the  trade,  a  bill  at  two  months, 
with  a  discount,  might  be  submitted  for  the  original  terms  of 
a  bill  at  four  months."  But  Lord  Ellenborough  refused  to 
hear  any  evidence  to  this  effect,  observing  that  it  would  be 
productive  of  intolerable  mischief  to  permit  brokers  to  devi- 
ate from  the  original  terms  of  the  contracts ;  and  the  pay- 
ment there  made  to  the  broker  was  held  unauthorized,  and 
no  defence  to  the  purchaser. 

In  Stewart  v.  Aberdeen  (4  Mees.  &  Wels.  211),  the  insur- 
ance company  had  paid  the  agent,  and  it  was  held  valid,  on 
the  ground  that  the  prior  dealings  between  the  parties  had 
authorized  it. 

In  Greaves  v.  Legg  (11  Exch.  642),  a  broker  at  Liverpool 
had  purchased  a  quantity  of  wool  for  merchants  in  London, 
and  the  vendors  gave  to  the  broker  notice  of  the  vessels  in 
which  they  would  ship  it  to  the  purchasers.  It  was  proved 
to  have  been  the  universal  usage  at  Liverpool  to  give  such 
notice  to  the  broker,  and  that  it  was  his  duty  to  communicate 
it  to  the  purchaser ;  held,  a  valid  performance  by  the  sellers  ; 
that  the  notice  thus  given  according  to  the  usage  of  trade 
was  sufficient. 

Authority  to  receive  such  a  notice  is  of  a  very  different 
character  and  responsibility  from  an  authority  in  a  broker 
to  receive  payment  for  goods. 

Russell  on  Factors  and  Agents,  48  Law  Lib.  68,  while  he 


220       CONTRACT  FOR  DISCLOSED  PRINCIPAL.      [CH.  IX. 

denies  the  authority  of  a  broker  as  such  to  receive  payment, 
adds  that  he  may,  "if  the  custom  of  trade  or  the  usual 
course  of  dealing  between  himself  and  his  principal  warrant 
it ; "  and  he  cites  Baring  v.  Corrie,  2  B.  &  Aid.  137,  before 
referred  to,  when  the  only  point  decided,  as  we  have  seen, 
was  that  a  broker  had  no  right  to  sell  in  his  own  name,  and, 
of  course,  no  right  to  receive  pajment.  The  duties  and 
rights  of  the  broker  to  contract  for  the  sale  of  the  grain  were 
as  clear  and  well  defined  in  this  case,  as  the  duties  and  rights 
of  a  pledgee  of  stock,  or  of  choses  in  action.  The  law 
defined  them.  It  was  no  part  of  his  duty  to  receive  pay- 
ment when  the  principal  was  known,  and  he  never  had 
possession  of  the  lye.  That  was  no  part  or  branch  of  his 
assumed  dut}',  which  was  simply  to  contract  for  a  sale. 
There  was  nothing  uncertain  or  obscure  in  the  broker's  legal 
duty  that  required  or  justified  proof  of  usage  to  make  certain 
or  plain.  It  gave  an  addition,  —  a  clear  addition  to,  not  an 
explanation  of,  his  authority. 

No  usage  is  admissible  to  control  the  rules  of  law.  In 
Wheeler  and  Newbold,  16  N.  Y.  392,  this  court  held  that 
proof  of  usage  of  brokers  in  New  York  city  to  sell  choses 
in  action  pledged  to  them  in  a  mode  unauthorized  by  law, 
was  inadmissible.  And  so  it  has  been  held  of  stock 
pledged  to  brokers.  Allen  v.  Dykers,  7  Hill,  497 ;  and  see 
Bowen  v.  Newell,  4  Seld.  190;  Merchants'  Bank  v.  Wood- 
ruff, 6  Hill,  174.  So  usage  is  not  admissible  to  contradict 
the  contract.  Clark  v.  Baker,  11  Met.  186;  Black ett  v. 
Assurance  Co.,  2  Tyrw.  266.  In  this  case  the  law  defined 
the  rights  and  duties  of  this  broker  as  clearly  as  it  did  those 
of  the  pledgee  of  stock  in  Allen  v.  Dykers,  or  of  choses  in 
action  in  Bowen  v.  Newell,  and  they  could  no  more  be  con- 
trolled by  usage. 

Usages  of  merchants  have  been  sparingly  adopted  by 
courts  in  this  State,  and  in  my  opinion  properly,  too.  Mr. 
Justice  Story  says  they  are  often  founded  in  mere  mistake, 
and  more  often  in  want  of  enlarged  views  of  the  full  bearing 
of  principles.     Donnell  v.  Col.  Ins.  Co.,  2  Sum.  377.     The 


§  107.]  TAJLMAGE  V.   BIERHAUSE.  221 

usage,  as  found,  seems  to  me  entirely  unreasonable,  and  to 
uphold  it  would  be  fraught  with  mischief.  Brokers  are 
thereby  allowed  to  receive  payment  for  principals  living  out 
of  the  city,  and  by  implication,  not  for  those  residing  in  the 
city.  Sound  reason  would  seem  to  call  for  an  opposite  rule, 
as  city  dealers  might  well  be  supposed  to  be  well  acquainted 
with  the  brokers,  and  to  know  who  were  worthy  of  trust ; 
while  countr}'  dealers  would  be  very  likely  to  share  the  fate 
of  these  plaintiffs,  —  a  grain  broker,  as  the  evidence  shows, 
being  quite  likely  to  be  without  pecuniary  responsibility. 
The  purchaser  need  never  incur  risk,  as  he  may  learn  the 
name  of  the  principal  and  always  pay  him  with  safety. 

In  this  case  it  would  seem  from  the  defendant's  testimony, 
that  this  money  was  obtained  from  him,  not  under  any  usage, 
but  the  false  pretence  of  the  broker  that  the  plaintiffs  had 
drawn  upon  him  for  the  proceeds  of  the  rye,  and  thereby 
impliedly  authorized  him  to  collect. 

The  judgment,  1  think,  should  be  reversed,  and  a  new  trial 
ordered,  costs  to  abide  the  event. 

Wright,  J.,  also  read  for  the  reversal. 

Judgment  reversed. 


§  107.]  TALMAGE  v.   BIERHAUSE. 

103  Indiana,  270.  — 1885. 

Action  for  the  price  of  goods.  Defence,  off-set  for  breach 
of  warranty  of  quality  of  goods  under  a  prior  contract. 
Judgment  for  defendants.  The  sale  was  made  by  a 
travelling   salesman,  who  gave  the  warrant}'. 

Mitchell,  C.  J.  .  .  .  It  is  next  contended  that  the  evi- 
dence fails  to  show  that  the  salesman  had  authority  to  make 
the  guaranty  which  the  defendants  claimed  was  made. 

The  inference  to  be  drawn  from  the  argument  of  counsel 
is,  that  it  was  incumbent  on  the  defendants  to  prove  affirma- 
tively, either  that  express  authority  to  that  end  had  been 
conferred,   or   that   such   sales  are   usually   attended  with 


222        CONTRACT  FOR  DISCLOSED  PRINCDPAL.      [CH.  IX. 

warranties.  It  may  be  said  that  the  position  contended  for 
has  the  support  of  authorit}*,  but  the  authorities  supporting  it 
are,  in  the  main,  cases  which  involved  an  agency  to  do  a 
single  act,  as  the  sale  of  some  article  by  an  agent  in  whose 
hands  the  particular  article  was  placed  for  sale.  Andrews 
v.  Kneeland,  6  Cow.  354 ;  Smith  v.  Tracy,  36  N.  Y.  79 ; 
Cooley  v.  Perrine,  41  N.  J.  L.  322  ;  Brady  v.  Todd,  9  C.  B. 
(N.  S.)  592. 

We  think  the  rule  generally  prevailing  is,  that  an  agent 
upon  whom  general  authority  to  sell  is  conferred  will  be 
presumed  to  have  authority  to  warrant,  unless  the  contrary 
appears.  Authority  to  sell  generalh*,  without  any  restric- 
tions, carries  with  it  prima  facie  authority  to  do  any  act  or 
make  any  declaration  in  regard  to  the  subject-matter  of  the 
sale  necessary  to  consummate  the  contract,  and  usually  inci- 
dent thereto,  and  until  the  contrary  is  made  to  appear,  it 
will  be  presumed  that  a  warranty  is  not  an  unusual  incident 
to  a  sale  by  an  agent  for  a  dealer  in  a  commodity  or  article, 
where  the  thing  sold  is  not  present  and  subject  to  the  in- 
spection of  the  purchaser.  Ahem  v.  Goodrpeed,  72  N.  Y. 
108  ;  Sturgis  v.  N.  J.  Steamboat  Co.,  62  N.  Y.  625 ;  Nelson 
v.  Cowing,  6  Hill,  336 ;  Schuchardt  v.  Aliens,  1  Wall.  359 ; 
Boothby  y.  Scales,  21  Wis.  626 ;  Howard  v.  Sheward,  L.  R. 
2  C.  P.  148 ;   Deming  v.  Chase,  48  Vt.  382. 

In  all  such  cases,  even  though  the  authority  of  the  agent  is 
restricted  by  instructions  from  his  principal,  he  will  be  bound 
b}*  a  warranty  attending  a  sale  made  b}'  the  agent,  unless  the 
purchaser  knew  of  the  restriction.  Murray  v.  Brooks,  41 
Iowa,  45.  .  .  . 

Judgment  affirmed. 


§  111.]  PICKERING  V.  BUSK.  223 


2.  Factors. 

§111.]  PICKERING  v.  BUSK. 

15  East  (K.  B.),  38.  —  1812. 

Trover  for  hemp.  Verdict  for  defendants.  Rule  to  set 
aside  verdict. 

One  Swallow,  a  factor  or  broker,  purchased  for  plaintiff  a 
quantity  of  hemp  which,  by  desire  of  plaintiff,  was  trans- 
ferred in  the  wharfinger's  book  to  the  name  of  Swallow. 
Later  Swallow  purchased  more  hemp  for  plaintiff,  which  was 
transferred  to  the  name  of  Pickering  or  Swallow.  Swallow, 
as  factor  or  broker,  sold  hemp  to  defendants'  assignors,  and 
transferred  to  them  plaintiff's  hemp. 

Lord  Ellenborough,  C.  J.  KganBfit  fairly  bp.  qgBati&UuH 
in  this  case  but  that  Swallow  had  an  implied  authority  to 
jjejl.  Strangers  can  only  look  to  foe  aets  of  the  parties,  and 
to  the  external  indicia  of  property,  aod  not  to  the'  private 
communications  which  may  pass  between  a  principal  and  his 
broker :  and  if  a  person  authorize  another  to  assume  the 
apparent  right  of  disposing  of  property  in  the  ordinary  course 
of  trade,  it  must  be  presumed  that  the  apparent  authority  is 
the  real  authority.  I  cannot  snhsr-.rihp.  to  t,hpf  doctrine,  that 
a  broker's  engagements  are  necessarily  and  in  all  flflfifif 
limited  to  his  actual  authority,  the  reality  of  which  is  after- 
wards to  hp.  t.ripri  by  t.hp  foot.  It  is  clear  that  he  may  bind 
his  principal  within  the  limits  of  the  authority  with  which  he 
has  been  apparently  clothed  by  the  principal  in  respect  of  the 
subject-matter ;  and  there  would  be  no  safety  in  mercantile 
transactions  if  he  could  not.  If  jhe  principal  _B£od_his  com- 
modity to  a  place,  where  it  is  the  ordinary  business  of  the 
person  to  whom.it  As  jnonfided  to.seil  it  must  be  intended  that 
the  commodity  was  sent  thither  for  the  purpose  of  sale.  If 
the  owner  of  a  horse  send  it  to  a  repository  of  sale,  can  it 
be  implied  that  he  sent  it  thither  for  any  other  purpose  than 
that  of  sale  ?    Or  if  one  send  goods  to  an  auction-room,  can  it 


224        CONTRACT  FOR  DISCLOSED  PRINCIPAL.      [CH.  LX. 

be  supposed  that  he  sent  them  thither  merely  for  safe  custody  ? 
Where  the  commodity  is  sent  in  such  a  way  and  to  such  a 
place  as  to  exhibit  an  apparent  purpose  of  sale,  the  principal 
will  be  bound,  and  the  purchaser  safe.  The  case  of  a  factor 
not  being  able  to  pledge  the  goods  of  his  principal  confided  to 
him  for  sale,  though  clothed  with  an  apparent  ownership,  has 
been  pressed  upon  us  in  the  argument,  and  considerably  dis- 
tressed our  decision.  The  court,  however,  will  decide  that 
question  when  it  arises,  consistently  with  the  principle  on 
which  the  present  decision  is  founded.  It  was  a  hard 
doctrine  when  the  pawnee  was  told  that  the  pledger  of 
the  goods  had  no  authority  to  pledge  them,  being  a  mere 
factor  for  sale ;  and  }*et  since  the  case  of  Paterson  v. 
Tosh,  that  doctrine  has  never  been  overturned.  I  re- 
member Mr.  Wallace  arguing,  in  Campbell  v.  Wright^  4 
Burr.  2046,  that  the  bills  of  lading  ought  to  designate  the 
consignee  as  factor,  otherwise  it  was  but  just  that  the 
consignors  should  abide  by  the  consequence  of  having  mis- 
led the  pawnees.  The  present  case,  however,  is  not  the  case 
of  a  pawn,  but  that  of  a  sale  by  a  broker  having  the  posses- 
sion for  the  purpose  of  sale.      The  sale  was   made  bv  a 

person  wbn  hflH  all  the  indicia  of  propprt.y  •  _t.hg  homp  fiQiilri 
on]y  have  been  transferred  into  his  np.mp.  for  t.hp  pm-poftfl  of 
sale.;  and  the  party  who  has  so  transferred  it  cannot  now 
rescind  the  contract.  If  the  plaintiff  had  Intended  to  retain 
the  dominion  over  the  hemp,  he  should  have  placed  it  in  the 
wharfinger's  books  in  his  own  name. 

Grose,  J.  The  question,  whether  the  plaintiff  is  bound  by 
the  act  of  Swallow,  depends  upon  the  authority  which 
Swallow  had.  This  being  a  mercantile  transaction,  the  jury 
was  most  competent  to  decide  it ;  and  if  I  had  entertained 
any  doubt,  I  should  rather  have  referred  the  question  to  them 
for  their  determination  :  but  I  am  perfectly  satisfied ;  I  think 
Swallow  had  a  power  to  sell. 

Le  Blanc,  J.  The  law  is  clearly  laid  down,  that  the  mere 
possession  of  personal  property  does  not  convey  a  title  to 
dispose  of  it ;  and,  which  is  equally  clear,  that  the  possession 


§  111.]  PICKERING  V.  BUSK.  225 

of  a  factor  or  broker  does  not  authorize  him  to  pledge.  But 
this  is  a  case  of  sale.  The  question  then  is  whether  Swallow- 
had  an  authority  to  sell.  To  decide  this  let  us  look  at  the 
situation  of  the  parties.  Swallow  was  a  general  seller  of 
hemp :  the  hemp  in  question  was  left  in  the  custody  of  the 
wharfingers,  part  in  the  name  of  Swallow,  and  part  in  tbe 
name  of  plaintiff  or  Swallow,  which  is  the  same  thing. 
Now  for  what  purpose  could  the  plaintiff  leave  it  in  the 
name  of  Swallow,  but  that  Swallow  might  dispose  of  it  in 
his  ordinary  business  as  broker ;  if  so,  the  broker  having 
sold  the  hemp,  the  principal  is  bound.  This  is  distinguish- 
able from  all  the  cases  where  goods  are  left  in  the  custody 
of  persons,  whose  proper  business  it  is  not  to  sell. 

Bayley,  J.  It  may  be  admitted  that  the  plaintiff  did  not 
give  Swallow  any  express  authorit}"  to  sell ;  but  an  implied 
authority  may  be  given :  and  if  a  person  put  goods  into 
the  custody  of  another  whose  common  business  it  is  to  sell, 
without  limiting  his  authority,  he  thereby  confers  an  implied 
authorit}'  upon  him  to  sell  them.  Swallow  was  in  the  habit  of 
bujing  and  selling  hemp  for  others,  concealing  their  names. 
And  now  the  plaintiff  claims  a  liberty  to  rescind  the  contract, 
because  no  express  authority  was  given  to  Swallow  to  sell. 
But  is  it  competent  to  him  so  to  do  ?  If  the  servant  of  a 
horse-dealer,  with  express  directions  not  to  warrant,  do 
warrant,  the  master  is  bound ;  because  the  servant,  having  a 
general  authority  to  sell,  is  in  a  condition  to  warrant,  and 
the  master  has  not  notified  to  the  world  that  the  general 
authority  is  circumscribed.     This  case  does  not  proceed  on 


the  ground  of  a  sale  in  market  overt,  but  it  proceeds  on  the 


principle,  that  the  plajntiff_having  given  Swallow  an  authority 
to  sell,  he  is  not  at  liberty  afterwards,  when  there  has  been  a 


sale,_to  deny  the  authority. 

Rule  discharged.1 

»  See  also  Daylight  Burner  Co.  v.  Odlin,  51  N.  H  56,  ante,  p.  208. 


16 


226       CONTRACT  FOR  DISCLOSED  PRINCDPAL.      [CH.  LX. 


3.  Broken. 

§  112.]  HIGGINS  v.  MOORE. 

34  New  York,  417.  — 1866. 
[Reported  herein  at  p.  215.] 


4.  Auctioneers. 

§  113.]  BROUGHTON   v.  SILLOWAY. 

114  Massachusetts,  71.  — 1873. 

Contract  for  refusal  of  defendant  to  convey  to  plaintiff 
certain  lands  offered  for  sale  by  defendant  at  public  auction, 
at  which  plaintiff  was  the  highest  bidder.  Verdict  for  plain- 
tiff.    Defendant  alleges  exceptions. 

The  contract  of  sale  provided  that  $500  should  be  paid  at 
the  time  of  the  sale.  Plaintiff  gave  his  check  for  $500  to  the 
auctioneer,  but  had  no  funds  to  meet  the  check.  Two  daj'S 
later  defendant  learned  that  the  auctioneer  had  received  the 
check,  and  that  the  drawer  had  no  funds  to  meet  it,  and  im- 
mediately revoked  the  agency  and  refused  to  be  bound  by  the 
sale.  Later  in  the  same  day  the  check  was  paid  to  the  auc- 
tioneer. No  notice  was  given  plaintiff  of  the  defendant's 
repudiation  of  the  transaction  until  after  the  check  was 
paid. 

X  The  defendant  asked  the  court  to  charge  that  the  auctioneer 
had  no  authority  to  receive  a  check  drawn  on  a  bank  in  which 
plaintiff  had  no  funds.  The  court  declined  so  to  charge, 
and  instructed  the  jury  in  effect  that  the  defendant  had  a 
right  to  repudiate  the  contract,  but  if  the  check  was  paid 
before  notice  of  revocation  to  the  plaintiff,  then  the  contract 
fcras  binding. 

Gray,  C.  J.  The  terms  of  the  contract  of  sale  requiring 
$500  to  be  paid  down,  the  auctioneer  had  no  righj;.  by  virtue 


§  114.]  MOULTON  V.   BOWKER.  227 

of  his  employment  as  such,  and  without  express  authority, 
to  bind  the  defendant  by  accepting  as  cash  a  check  drawn 
against  a  bank  in  which  the  drawer  had  at  the  time  no  funds. 
Sykes  v.  Giles,  5  M.  &  W.  645  ;  Williams  v.  Evans,  L.  R. 
1  Q.  B.  352  ;  Taylor  v.  Wilson,  11  Met.  44 ;  Story  on  Agency, 
§  209. 

There  was  no  evidence  in  the  case  that  the  drawer  had 
funds  in  the  bank  when  the  check  was  drawn,  or  that  the  de- 
fendant knew  that  the  auctioneer  had  taken  a  check  until  the 
second  day  afterwards,  or  even  assented  to  or  ratified  the 
taking  of  the  check.  The  act  of  the  auctioneer  in  taking 
the  check  being  unauthorized,  it  was  not  necessary  for  the 
defendant  to  repudiate  itr 

It  follows  that  the  defendant  was  entitled  to  the  first  instruc- 
tion requested,  and  that  the  instructions  given  did  not  meet 
the  requirements  of  the  case. 

Exceptions  sustained. 


§113.]  WOOLFE  v.  HORNE. 

L.  R.  2  Queen's  Bench  Division,  355.  —  1877. 
[Reported  herein  at  p.  383.] 


5.  Attorneys-at-law. 

§  114.]  MOULTON  v.  BOWKER. 

115  Massachusetts,  36.  — 1874. 

Writ  of  entry  to  recover  the  undivided  half  of  certain 
premises.     Verdict  directed  for  tenant. 

Demandants  claimed  under  a  sheriffs  deed  executed  upon 
a  sale  of  the  premises  after  attachment  on  mesne  process 
followed  by  judgment  on  execution.  The  tenant  claimed 
under  deed  from  the  owner  against  whom  the  attachment  was 


228        CONTRACT  FOR   DISCLOSED  PRINCDPAL.      [CH.  IX. 

issued,  and  offered  in  evidence  a  certified  copy  of  a  discharge 
of  the  attachment  signed  by  one  Searle,  who  was  demandauts' 
attorne}-  of  record  in  the  attachment  proceedings.  Demand- 
ants objected  to  the  admission  of  the  paper,  and  offered  to 
prove  that  Searle  acted  without  authority  and  in  fraud  of  their 
rights.  The  court  ruled  that  the  discharge  by  Searle  enabled 
the  owner  to  give  a  valid  title  to  the  tenant  who,  it  was  ad- 
mitted, was  cognizant  of  no  fraud. 

Gray,  C.  J.  An  attornev-at-law  has  authority,  by  virtue 
of  his  employment  as  such,  to  do  in  behalf  of  his  client  all 
acts,  in  or  out  of  court,  necessary  or  incidental  to  the  prose- 
cution and  management  of  the  suit,  and  which  affect  the 
remedy  only,  and  not  the  cause  of  action ;  and  we  can  have 
no  doubt  that  this  includes  the  power  to  release  an  attach- 
ment, at  least  before  judgment,  which  is  all  that  this  case 
reojiires  ns  to  consider.  Lewis  v.  Sumner,  13  Met  269  ; 
Shores  v.  Caswell,  Id.  413 ;  Wieland  v.  White,  109  Mass. 
392  ;  Jenney  v.  Delesdernier,  20  Me.  183  ;  Rice\.  Wilkins,  21 
Me.  558  ;  Pierce  v.  Strickland,  2  Story,  292  ;  Levi  v.  Abbott, 
4  Exch.  588. 

The  act  of  the  demandants'  attorney  was  therefore  within 
his  professional  authority,  and  bound  his  clients;  and  if  jt 
Yj^jYflMjjilo"*  thoir  roT^pijy  must  be  sought  against  him,  it 
being  agreed  that  the  other  party  was  not  cognizant  of  any 
fraud.  Judgment  on  the  verdict  for  the  tenant 


6.  Bank  cashiers. 

§  115.]     MERCHANTS'  BANK  v.  STATE   BANK. 

10  Wallace  (U.  S.),  604.  — 1870. 

Action  on  three  checks  drawn  by  M.  W.  &  Co.  upon  de- 
fendant bank,  and  certified  as  "  good  "  by  its  cashier.  Judg- 
ment directed  for  defendant     Plaintiff  brings  error. 


§  115.]      merchants'  bank  v.  state  bank.         229 

M.  W.  &  Co.  negotiated  with  plaintiff  for  the  purchase  of 
gold.  A  representative  of  M.  W.  &  Co.,  and  the  cashier  of 
defendant  bank,  went  to  plaintiff  bank,  counted  the  gold 
certificates,  and  gave  plaintiff  a  check,  which  defendant's 
cashier  then  certified  as  "good."  It  did  not  appear  whether 
defendant  was  interested  in  the  gold  purchase,  and  the  action 
may  here  be  treated  as  upon  the  certification  of  the  checks. 
Evidence  was  introduced  that  tended  to  show  that  over 
twent}r  bank  cashiers  in  Boston  had  never  certified  checks 
except  by  express  authorit}'.  Defendant  denies  that  its 
cashier  had  authority  to  certify  checks. 

Mr.  Justice  Swayne.  .  .  .  But  it  is  strenuously  denied 
that  the  cashier  had  authority  to  certify  the  checks  in 
question.  .  .  . 

The  power  of  the  bank  to  certify  checks  has  been  suffi- 
ciently examined.  The  question  we  are  now  considering  is 
the  authority  of  the  cashier.  It  is  his  duty  to  receive  all  the 
funds  which  come  into  the  bank,  and  to  enter  them  upon  its 
books.  The  authority  to  receive  implies  and  carries  with  it 
authority  to  give  certificates  of  deposit  and  other  proper 
vouchers..  Where  the  money  is  in  the  bank,  he  has  the  same 
authority  to  certify  a  check  to  be  good,  charge  the  amount  to 
the  drawer,  appropriate  it  to  the  payment  of  the  check,  and 
make  the  proper  entry  on  the  hooks  of  the  bank.  This  he 
is  authorized  to  do  virtute  officii.  The  power  is  inherent  in 
the_ojij£fi^  Wild  v.  The  Bank  of  Passamaquoddy,  3  Mason, 
506  ;  Burnham  v.  Webster,  19  Me.  232  ;  Elliot  v.  Abbot,  12 
N.  H.  549  ;  Bank  of  Vergennes  v.  Warren,  7  Hill,  91 ;  Lloyd 
v.  The  West  Branch  Bank,  15  Pa.  St.  172 ;  Badger  v.  The 
Bank  of  Cumberland,  26  Me.  428  ;  Bank  of  Kentucky  v. 
The  Schuylkill  Bank,  1  Parsons's  Select  Cases,  182  ;  Fleckner 
v.  Bank  of  the  United  States,  8  Wheat.  338. 

The  cashier  is  the  executive  officer,  through  whom  the 
whole  financial  operations  of  the  bank  are  conducted.  He 
receives  and  pays  out  its  monejs,  collects  and  pays  its  debts, 
and  receives  and  transfers  its  commercial  securities.  Tellers 
and  other  subordinate  officers  may  be  appointed,  but  they 


230        CONTRACT  FOR  DISCLOSED  PRINCIPAL.      [CH.  IX. 

are  under  his  direction,  and  are,  as  it  were,  the  arms  by 
which  designated  portions  of  bis  various  functions  are  dis- 
charged. A  teller  may  be  clothed  with  the  power  to  certify 
checks,  but  this  in  itself  would  not  affect  the  right  of  the 
cashier  to  do  the  same  thing.  The  directors  may  limit  his 
authority  as  they  deem  proper,  but  this  would  not  affect 
those  to  whom  the  limitation  was  unknown.  Commercial 
Bank  of  Lake  Erie  v.  Norton  et  al.,  1  Hill,  501 ;  Bank  of 
Vergennes  v.  Warren,  7  Id.  91 ;  Beers  v.  The  Phoenix  Glass 
Co.,  14  Barb.  358 ;  Farmers'  &  Mechanics '  Bank  v.  Butch- 
ers' t&  Drovers'  Bank,  14  N.  Y.  624 ;  North  River  Bank  v. 
Ay  mar,  3  Hill,  262,  268 ;  Barnes  v.  Ontario  Bank,  19  N.  Y. 
152,  166. 

The  foundation  upon  which  this  liability  rests  was  con- 
sidered  in  an  earlier  part  of  this  opinion.  Those  deal- 
ing with  a  bank  in  good  faith  have  a  right  to  presume 
integrity  on  the  part  of  its  officers,  when  acting  within  the 
apparent  sphere  of  their  duties,  and  the  bank  is  bound 
accordingly. 

In  Barnes  v.  The  Ontario  Bank,  19  N.  Y.  152,  the 
cashier  had  issued  a  false  certificate  of  deposit.  In  the 
Fanners'  &  Mechanics'  Bank  v.  The  Butchers'  &  Drovers' 
Bank,  14  N.  Y.  624;  S.  C.  16  N.  Y.  133,  and  in  Meads  v. 
The  Merchants'  Bank  of  Albany,  25  N.  Y.  143,  the  teller 
had  fraudulently  certified  a  check  to  be  good.  In  each  case 
the  bank  was  held  liable  to  an  innocent  holder. 

It  is  objected  that  the  checks  were  not  certified  by  the 
cashier  at  his  banking-house.  The  provision  of  the  Act  of 
Congress  as  to  the  place  of  business  of  the  banks  created 
under  it  must  be  construed  reasonably.  The  business  of 
ever}' bank  awa}T  from  its  office  —  frequently  large  and  im- 
portant—  is  unavoidably  done  at  the  proper  place  b}-  the 
cashier  in  person,  or  by  correspondents,  or  other  agents.  In 
the  case  before  us,  the  gold  must  necessarily  have  been 
bought,  if  at  all,  at  the  buying  or  the  selling  bank,  or  at 
some  third  locality.  The  power  to  pay  was  vital  to  the 
power  to  buy,  and  inseparable  from  it.     There  is  no  force 


§  115.]      merchants'  bank  v.  state  bank.         231 

in  this  objection.  Bank  of  Augusta  v.  Earle,  13  Pet 
519;  Pendleton  v.  Bank  of  Kentucky,  1  T.  B.  Munroe, 
171.  .  .  . 

Judgment  reversed,  and  a  venire  de  novo  awarded. 

Mr.  Justice  Clifford  (with  whom  concurred  Mr.  Justice 
Davis)  read  a  dissenting  opinion. 


CHAPTER  X. 

CONTRACT  OF  AGENT  IN  BEHALF  OF  UNDISCLOSED 
PRINCIPAL. 

1.  Liability  of  undisclosed  principal:  general  rule. 

§  124.]  KAYTON  v.   BARNETT. 

116  New  York,  625. —  1889. 

Action  to  recover  a  balance  of  purchase  price  due  for 
property  sold  and  delivered  to  one  Bishop,  ostensibly  for 
himself,  but  secretly  purchased  by  him  for  defendants. 
Plaintiffs  non-suited,  and  judgment  for  defendants.  Plaintiffs 
appeal. 

Follett,  C.  J.  When  goods  are  sold  on  credit  to  a  person 
whom  tb^  yPnrlr>r  biltom  to  be  the  purchaser,  and  he  after- 
wards discovers  that  the  person  credited  bought  as  agent  for 
another.  tbp  v^nHnr  hnq  a  (tansft  pf  action  agaiust  the  principal 
for  the  purchase  price.  The  defendants  concede  the  existence 
of  this  general  rule,  but  assert  that  it  is  not  applicable  to  this 
case,  because,  while  Bishop  and  the  plaintiffs  were  negotiating, 
they  stated  they  would  not  sell  the  property  to  the  defendants, 
and  Bishop  assured  them  he  was  buying  for  himself,  and  not 
for  them.  It  appears,  by  evidence  which  is  wholly  uncontra- 
dicted, that  the  defendants  directed  every  step  taken  by 
Bishop  in  his  negotiations  with  plaintiffs ;  that  the  property 
was  purchased  for  and  delivered  to  the  defendants,  who  have 
ever  since  retained  it ;  that  they  paid  the  $3,000  towards  the 
purchase  price,  and  agreed  with  Bishop,  after  the  notes  had 
been  delivered,  to  hold  him  harmless  from  them.  Notwith- 
standing the  assertion  of  the  plaintiffs  that  the}'  would  not  sell 
to  the  defendants,  they,  through  the  circumvention  of  Bishop 
and  the  defendants,  did  sell  the  property  to  the  defendants,  who 


§  124.]  HUBBABD  V.   TENBROOK.  233 

have  had  the  benefit  pf  jtT  and  havp.  npypr  pnirl  tho  r°mninrifir 
<^f  the  purchase  price  pursuant  to  their  agrpp.mp.Qk  Bishop 
was  the  defendants'  agent.  Bishop's  mind  was,  in  this  tran- 
saction, the  defendants'  mind,  and  so  the  minds  of  the  partjeji 
met,  and  the  defendants  having,  through  their  own  and  their 
agent's  deception,  acquired  the  plaintiffs'  property  by  uur- 
chase,  cannot  successfully  assert  that  they  are  not  liable  fur 
the  remainder  of  the  purchase  price  because  they,  through 
their  agent,  succeeded  in  inducing  the  defendants  to  do  that 
which  they  did  not  intend  to  do,  and,  perhaps t  would  not  have 
dpne  had  the  defendants  not  dealt  disingenuously. 

The  judgment  should  be  reversed  and  a  new  trial  ordered, 
with  costs  to  abide  the  event. 

All  concur,  except  Haight,  J.,  not  sitting. 

Judgment  reversed. 


§  124.]  HUBBARD  v.   TENBROOK. 

124  Pennsylvania  State,  291.  — 1889. 

Assumpsit  for  goods  sold  and  delivered  to  one  Sides,  doing 
business  in  his  own  name,  but  secretly  for  defendants. 
Judgment  for  plaintiff  upon  the  pleadings.  Defendants  bring 
error.  wmmm 

Mr.  Justice  Mitchell.  This  case  affords  one  among  many 
examples  of  the  failure  of  the  so-called  reformed  procedure 
to  accomplish  anything  towards  the  brevity,  the  clearness,  the 
accuracy,  or  the  convenience  of  legal  forms.  So  long  as  the 
fundamental  principle  of  our  remedial  jurisprudence  shall  be, 
that  upon  conflicting  evidence  the  jury  shall  ascertain  the 
facts,  and  upon  ascertained  facts  the  judges  shall  pronounce 
the  law,  so  long  will  it  be  a  cardinal  rule  of  pleading,  bj'  what- 
ever name  pleading  shall  be  called,  that  the  line  of  distinction 
between  facts  and  the  evidence  to  prove  them  shall  be  kept 
clear  and  well-defined.  The  notion  of  the  reforming  enthusiast 
that  the  average  litigant  or  his  average  lawyer  can  make  a 


234      CONTRACT  FOR  UNDISCLOSED  PRINCDPAL.      [CH.  X. 

shorter,  clearer,  or  less  redundant  statement  of  his  case  if 
left  to  his  own  head,  than  if  directed  and  restrained  by  the 
settled  forms,  sifted,  tested,  and  condensed  as  they  have  been 
b}'  generations  of  the  acutest  intellects  ever  devoted  to  a 
logical  profession,  is  as  vain  as  that  of  any  other  compounder 
of  panaceas. 

The  plaintiff's  statement  is  at  least  three  times  as  long  as 
a  declaration  in  the  established  forms  need  have  been,  and 
about  half  of  it  is  occupied,  not  with  the  averment  of  facts, 
but  with  a  recital  of  evidence.  Indeed,  the  strongest  argu- 
ment for  the  defendants  is  that  the  statement  fails  to  aver 
two  essential  facts,  to  wit,  the  delivery  of  the  goods  to  Sides, 
and  the  agency  of  Sides  for  the  defendants  as  his  undisclosed 
principals. 

Fortunately  for  the  plaintiff,  his  statement  is  helped  out  as 
to  the  first  fact  by  the  bill  of  particulars,  which,  being  sworn 
to  be  a  copy  of  his  book  of  original  entry,  imports  delivery  as 
well  as  sale.  The_agency,  though  stated  in  the  objectionable 
form  of  an  inference  from  the  previously  recited  evidence,  is 
clearly  intended  to  be  averred,  and  may  fairly  be  so  treated. 

Taking  the  statement,  therefore,  in  its  plain  intent,  it  sets 
out  that  plaintiff  sold  and  delivered  a  quantity  of  bams  to  one 
Sides,  who  was  conducting  a  grocery  business  in  his  own 
name,  but  with  the  propertA'  and  as  the  agent  of  defendants. 
The  defendants  filed  an  affidavit  of  d<ej£n(£erf.and  a  supplemen- 
tary  one,  the  substance  of  which  is  that  "  Sides  was  not  the 
agent  of  defendants  to  purchase  from  plaintiff  or  any  one 
else,"  and  that  he  "  was  employed  as  salesman  only,  by  said 
defendants,  without  an}-  authority  whatever  to  act  for  or  bind 
defendants  for  the  purchase  of  any  goods  or  merchandise 
upon  credit  of  the  said  defendants."  We  have  thus  the  ques- 
tion presented  whether  an  agent  may  be  put  forward  to  con- 
duct a  separate  business  in  his  own  name,  and  the  principal 
escape  liability  by  a  secret  limitation  on  the  agent's  authority 
to  purchase. 

The  answer  is  not  at  all  doubtful.  A  man  conducting  an 
apparently  prosperous  and  profitable  business  obtains  credit 


§  124.]  WATTEATJ  V.   FENWICK.  235 

thereby,  and  his  creditors  have  a  right  to  suppose  that  his 
profits  go  into  his  assets  for  their  protection  in  case  of  a  pin,cji 
or  an  unfavorable  turn  in  the  business.  To  allow  an  uudis- 
closed  principal  to  absorb  the  profits,  and  th^n  whpn  Hip 
pinch  comes  to  escape  responsibility  on  t,he  ground  of  oro'erg 
to  his  agent  not  to  buy  on  credit,  would  be  a  plain  fraud  on 
the_puhlic. 

No  exact  precedent  has  been  cited ;  none  is  needed. 
The  rule  so  vigorously  contended  for  by  the  plaintiff  in  error, 
that  those  dealing  with  an  agent  are  bound  to  look  to  his 
authority,  is  freely  conceded  ;  but  this  case  falls  within  the 
equally  established  rule  tha,t  those  clothing  an  agent  with 
apparent  authority  are,  as  to  parlies  dealing  on  the  faith  of 
such  authority,  conclusively  estopped  from  denying  it. 

The  affidavits  set  up  no  available  defence,  and  the  judg- 
ment is 

Affirmed. 


§124.]  WATTEAU  v.   FENWICK. 

1893,  1  Queen's  Bench  Division,  346. 

Action  for  goods  sold  and  delivered  to  one  Humble,  doing 
business  in  his  own  name,  but  secretly  for  defendants.  Judg- 
ment for  plaintiff.     Defendants  appeal. 

Lord  Coleridge,  C.  J.  The  judgment  which  I  am  about 
to  read  has  been  written  by  my  Brother  Wills,  and  I  entirely 
concur  in  it. 

Wills,  J.  The  plaintiff  sues  the  defendants  for  price  of 
cigars  supplied  to  the  Victoria  Hotel,  Stockton-upon-Tees. 
The  house  was  kept,  not  by  the  defendants,  but  by  a  person 
named  Humble,  whose  name  was  over  the  door.  The  plain- 
tiff  gave  credit  to  Humble,  and  to  him  alone,  and  had  never 
heard  of  the  defendants.  The  business,  however,  was  really 
the  defendants',  and  they  had  put  Humble  into  it  to  manage 
it  for  them,  and  had  forbidden  him  to  buy  cigars  on  credit. 


236      CONTRACT  FOE  UNDISCLOSED  PRINCDPAL.      [CH.  X. 

The  cigars,  however,  were  such  as  would  usually  be  supplied 
to  and  dealt  in  at  such  an  establishment.  The  learned  county 
court  judge  held  that  the  defendants  were  liable.  I  am  of 
opinion  that  he  was  right. 

There  seems  to  be  less  of  direct  authority  on  the  sub- 
ject than  one  would  expect.  But  I  think  that  the  Lord 
Chief  Justice  during  the  argument  laid  down  the  correct 
principle,  viz.,  once  it  is  established  that  the  defendant 
was  the  real  principal,  the  ordinary  doctrine  as  to  principal 
and  agent  applies,  —  that  the  principal  is  liable  for  all  the 
acts  of  the  ageut  which  are  within  the  authority,  usually 
^r  ,j  confided  to  an  agent  of  that  character,  notwithstanding  limi- 
tations, as  between  the  principal  and  the  ageut,  put  upon 
that  authorit}'.  It  is  said  that  it  is  only  so  where  there  has 
been  a  holding  out  of  authority,  which  cannot  be  said  of  a 
case  where  the  person  supplying  the  goods  knew  nothing  of 
the  existence  of  a  principal.  But  I  do  not  think  so.  Other- 
wise, in  every  case  of  undisclosed  principal,  or  at  least  in 
ever}'  case  where  the  fact  of  there  being  a  principal  was 
undisclosed,  the  secret  limitation  of  authority  would  prevail 
and  defeat  the  action  of  the  person  dealing  with  the  agent 
and  then  discovering  that  he  was  an  agent  and  had  a 
principal. 

But  in  the  case  of  a  dormant  partner,  it  is  clear  law  that 
no  limitation  of  authorit}'  as  between  the  dormant  and  active 
partner  will  avail  the  dormant  partner  as  to  things  within  the 
ordinary  authority  of  a  partner.  The  law  of  partnership  is, 
on  such  a  question,  nothing  but  a  branch  of  the  general  law 
of  principal  and  agent,  and  it  appears  to  me  to  be  undisputed 
and  conclusive  on  the  point  now  under  discussion. 

The  principle  laid  down  by  the  Lord  Chief  Justice,  and 
acted  upon  by  the  learned  county  court  judge,  appears  to  be 
identical  with  that  enunciated  in  the  judgments  of  Cockburn, 
C.  J.,  and  Mellor,  J.,  in  Edmunds  v.  Bushell,  Law  Rep.  1 
Q.  B.  97,  the  circumstances  of  which  case,  though  not  iden- 
tical with  those  of  the  present,  come  very  near  to  them. 
There  was  no  holding  out,  as  the  plaintiff  knew  nothing  of 


§  125.]  IRVINE  V.  WATSON.  287 

the  defendant.  I  appreciate  the  distinction  drawn  by  Mr. 
Finlay  in  his  argument,  but  the  principle  laid  down  in  the 
judgments  referred  to,  if  correct,  abundantly  covers  the  pres- 
ent case.  I  cannot  find  that  any  doubt  has  ever  been  ex- 
pressed that  it  is  correct,  and  I  think  it  is  right,  and  that 
very  mischievous  consequences  would  often  result  if  that 
principle  were  not  upheld. 

In  my  opinion  this  appeal  ought  to  be  dismissed  with 
costs.  Appeal  dismissed. 


2.    Same  :  exception  as  to  state  of  accounts. 

§125.]  IRVINE  v.   WATSON. 

Law  Reports,  5  Queen's  Bench  Division,  414.  — 1880. 

Action  to  recover  the  price  of  certain  casks  of  oil.  Judg- 
ment for  plaintiffs.     Defendants  appeal. 

Bramwell,  L.  J.  I  am  of  opinion  that  the  judgment  must 
be  affirmed.  The  facts  of  the  case  are  shortly  these :  The 
plaintiffs  sold  certain  casks  of  oil,  and  on  the  face  of  the  con- 
tract of  sale  Conning  appeared  as  the  purchaser.  But  the 
plaintiffs  knew  that  he  was  only  an  agent  buying  for  prin- 
cipals, for  he  told  them  so  at  the  time  of  the  sale,  therefore 
they  knew  that  they  had  a  right  against  somebody  besides 
Conning.  On  the  other  hand,  the  defendants  knew  that 
somebody  or  other  had  a  remedy  against  them,  for  they  had 
authorized  Conning,  who  was  an  ordinary  broker,  to  pledge 
their  credit,  and  the  invoice  specified  the  goods  to  have  been 
bought  "  per  John  Conning."  Then,  that  being  so,  the  de- 
fendants paid  the  broker ;  and  the  question  is  whether  such 
payment  discharged  them  from  their  liability  to  the  plaintiffs. 
I  think  it  is  impossible  to  say  that  it  discharged  them,  unless 
thejr  were  misled  by  some  conduct  of  the  plaintiffs  into  the  be- 
lief that  the  broker  had  already  settled  with  the  plaintiffs,  and 
made  such  payment  in  consequence  of  such  belief.     But  it  is 


238     CONTRACT  FOE  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

contended  that  the  plaintiffs  here  did  mislead  the  defendants 
into  snch  belief,  by  parting  with  the  possession  of  the  oil  to 
Conning  without  getting  the  money.  The  terms  of  the  con- 
tract were  "  cash  on  or  before  deliver}-,"  and  it  is  said  that 
the  defendants  had  a  right  to  suppose  that  the  sellers  would  not 
deliver  unless  they  received  payment  of  the  price  at  the  time  of 
delivery.  I  do  not  think,  however,  that  that  is  a  correct  view 
of  the  case.  The  plaintiffs  had  a  perfect  right  to  part  with  the 
oil  to  the  broker  without  insisting  strictly  upon  their  right  to 
prepayment,  and  there  is,  in  my  opinion,  nothing  in  the  facts  of 
the  case  to  justify  the  defendants  in  believing  that  they  would 
so  insist  No  doubt,  if  there  was  an  invariable  custom  in  the 
trade  to  insist  on  prepayment  where  the  terms  of  the  contract 
entitled  the  seller  to  it,  that  might  alter  the  matter ;  and  in 
such  case  non-insistence  on  prepayment  might  discharge  the 
buyer  if  he  paid  the  broker  on  the  faith  of  the  seller  already 
having  been  paid.  But  that  is  not  the  case  here ;  the  evi- 
dence before  Bowen,  J.,  shows  that  there  is  no  invariable 
custom  to  that  effect. 

Apart  from  all  authorities,  then,  I  am  of  opinion  that  the 
defendants'  contention  is  wrong,  and  upon  looking  at  the  au- 
thorities, I  do  not  think  that  any  of  them  are  in  direct  conflict 
with  that  opinion.  It  is  true  that  in  Thomson  v.  Davenport, 
9  B.  &  C.  78,  both  Lord  Tenterden  and  Bayley,  J.,  suggest 
in  the  widest  terms  that  a  seller  is  not  entitled  to  sue  the 
undisclosed  principal  on  discovering  him,  if  in  the  meantime 
the  state  of  account  between  the  principal  and  the  agent  has 
been  altered  to  the  prejudice  of  the  principal.  But  it  is  im- 
possible to  construe  the  dicta  of  those  learned  judges  in  that 
case  literally  ;  it  would  operate  most  unjustly  to  the  vendor 
if  we  did.  I  think  the  judges  who  uttered  them  did  not  intend 
a  strictly  literal  interpretation  to  be  put  on  their  words.  But 
whether  they  did  or  no,  the  opinion  of  Park,  B.,  in  Heald  v. 
Kenworthy,  10  Exch.  739  ;  24  L.  J.  (Exch.)  76,  seems  to  me 
preferable  ;  it  is  this,  that  "  If  the  conduct  of  the  seller  would 
make  it  unjust  for  him  to  call  upon  the  buyer  for  the  money, 
as  for  example,  where  the  principal  is  induced  by  the  conduct 


§  125.]  IRVINE  V.   WATSON.  239 

of  the  seller  to  pay  his  agent  the  money  on  the  faith  that  the 
agent  and  seller  have  come  to  a  settlement  on  the  matter,  or 
if  any  representation  to  that  effect  is  made  by  the  seller, 
either  by  words  or  conduct,  the  seller  cannot  afterwards 
throw  off  the  mask  and  sue  the  principal."  That  is  in  my 
judgment  a  much  more  accurate  statement  of  the  law.  But 
then  the  defendants  rely  on  the  case  of  Armstrong  v.  Stokes, 
Law  Rep.  7  Q.  B.  598.  Now  that  is  a  very  remarkable  case  ; 
it  seems  to  have  turned  in  some  measure  upon  the  peculiar 
character  filled  by  Messrs.  Ryder  as  commission  merchants. 
The  court  seems  to  have  thought  it  would  be  unreasonable 
to  hold  that  Messrs.  Ryder  had  not  authoritj'  to  receive  the 
money.  I  think  upon  the  facts  of  that  case  that  the  agents 
would  have  been  entitled  to  maintain  an  action  for  the  money 
against  the  defendant,  for  as  commission  merchants  the}*  were 
not  mere  agents  of  the  bu}er.  Moreover  the  present  is  a 
case  which  Blackburn,  J.,  there  expressly  declines  to  decide. 
He  expressly  draws  a  distinction  between  a  case  in  which,  as 
in  Armstrong  v.  Stokes,  the  seller  at  the  time  of  the  sale 
supposes  the  agent  to  be  himself  a  principal,  and  gives  credit 
to  him  alone,  and  one  in  which,  as  here,  he  knows  that  the 
person  with  whom  he  is  dealing  has  a  principal  behind, 
though  he  does  not  know  who  that  principal  is. 

It  is  to  my  mind  certainly  difficult  to  understand  that  dis- 
tinction, or  to  see  how  the  mere  fact  of  the  vendor  knowing 
or  not  knowing  that  the  agent  has  a  principal  behind  can 
affect  the  liability  of  that  principal.  I  should  certainly  have 
thought  that  his  liability  would  depend  upon  what  he  him- 
self knew,  that  is  to  say,  whether  he  knew  that  the  vendor 
had  a  claim  against  him  and  would  look  to  him  for  pajment 
in  the  agent's  default  But  it  is  sufficient  here  that  the 
defendants  did  know  that  the  sellers  had  a  claim  against 
them,  unless  the  broker  had  alreadj'  paid  for  the  goods. 

In  this  view  of  the  case  it  is  unnecessary  to  consider  the 
further  question  raised  by  Mr.  Kenned}',  as  to  whether  a 
payment  on  a  general  running  account,  as  distinguished 
from  a  payment  specifically  appropriated  to  the  particular 


240      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

purchase,  would  be  sufficient  to  bring  the  case  within  Lord 
Tenterden's  qualification  of  the  general  rule. 

(Baggallay  and  Brett,  L.  JJ.,  also  delivered  opinions  to 
the  same  effect.)  Appeal  dismissed. 


§  125.]  FRADLEY  v.   HYLAND. 

37  Federal  Reporter,  49. —  1888. 
[Circuit  Court,  S.  D.,  New  York."] 

Libel  in  admiralty  for  supplies  furnished  one  Gibson, 
ostensibly  for  himself,  but  for  the  benefit  of  defendant  whose 
boat  Gibson  was  managing.  Defendant  had  supplied  Gibson 
with  funds  and  instructed  him  not  to  purchase  on  credit. 
Defendant  had  settled  with  Gibson,  and  allowed  him  for 
these  supplies.    Decree  for  libellant.     Respondent  appeals. 

Wallace,  J.  ...  As  to  the  first  cause  of  action  no  ques- 
tion is  made  by  the  appellant  that  it  is  not  of  admiralty 
cognizance,  but  he  insists  that  he  is  not  liable  as  a  principal 
for  the  supplies  sold  to  his  agent  by  the  libellant,  under  the 
circumstances  of  the  case.  The  general  rule  is  familiar  that, 
when  goods  are  bought  by  an  agent  who  does  not  at  the 
time  disclose  that  he  is  acting  as  agent,  the  seller,  although 
he  has  relied  solely  upon  the  agent's  credit,  may,  upon  dis- 
covering the  principal,  resort  to  the  latter  for  pa}rment.  But 
the  rule  which  allows  the  seller  to  have  recourse  against  an 
undisclosed  principal  is  subject  to  the  qualification  stated  by 
Lord  Mansfield  in  Railton  v.  Hodgson,  4  Taunt.  576,  and  by 
Tenterden,  C.  J.,  and  Bayley,  J.,  in  Thomson  v.  Davenport, 
9  B.  &  C.  78.  As  stated  by  Mr.  Justice  Bayley,  it  is 
"that  the  principal  shall  not  be  prejudiced  by  being  made 
personally  liable  if  the  justice  of  the  case  is  that  he  should 
not  be  personally  liable.  If  the  principal  has  paid  the  agent, 
or  if  the  state  of  accounts  between  the  agent  here  and  the 
principal  would  make  it  unjust  that  the  seller  should  call  on 


§  125.]  FRADLEY  V.  HYLA2TO.  241 

the  principal,  the  fact  of  payment  or  such  a  state  of  accounts 
would  be  an  answer  to  the  action  brought  by  the  seller, 
where  he  has  looked  to  the  responsibility  of  the  agent." 
The  principal  must  respond  to,  and  may  avail  himself  of,  a 
contract  made  with  another  by  an  undisclosed  agent  When 
he  seeks  to  enforce  a  bargain  or  purchase  made  by  his  agent, 
the  rule  of  law  is  that,  if  the  agent  contracted  as  for  himself, 
the  principal  can  only  claim  subject  to  all  equities  of  the 
seller  against  the  agent.  In  the  language  of  Parke,  B. : 
"  He  must  take  the  contract  subject  to  all  equities,  in  the 
same  way  as  if  the  agent  were  the  sole  principal"  (Beck- 
ham v.  Drake,  9  M.  &  W.  79),  and  accordingly  subject  to 
any  right  of  set-off  on  the  part  of  the  seller  (Borries  v.  Bank, 
29  L.  T.  N.  S.  689).  Thus  the  rights  of  the  principal  to 
enforce,  and  his  liability  upon,  a  contract  of  sale  or  purchase 
made  by  his  agent,  without  disclosing  the  fact  of  the  agency, 
are  precisely  co-extensive,  as  regards  the  other  contracting 
party,  if  the  limitation  of  his  liability  is  accurately  stated  in 
the  earlier  cases.  The  qualification  of  the  principal's  lia- 
bility to  respond  to  his  agent's  contract,  as  stated  in  the 
earlier  authorities  mentioned,  was  narrowed  by  the  interpre- 
tation adopted  in  Heald  v.  Kenworthy,  10  Exch.  739,  to  the 
effect  that  the  principal  is  not  discharged  from  full  responsi- 
bility unless  he  has  been  led  by  the  conduct  of  the  seller  to 
make  payment  to  or  settle  with  the  agent;  and  the  doctrine 
of  this  case  has  been  reiterated  in  many  subsequent  cases, 
both  in  England  and  in  this  countr}r,  where  the  agent  did  not 
contract  as  for  himself,  but  as  a  broker,  or  otherwise  as 
representing  an  undisclosed  principal.  One  of  the  more 
recent  English  cases  of  this  class  is  Davison  v.  Donaldson, 
9  Q.  B.  D.  623.  But  as  is  shown  in  Armstrong  v.  Stokes, 
L.  R.  7  Q.  B.  598,  the  version  of  Heald  v.  Kenworthy,  while  a 
correct  interpretation  of  the  rule  of  the  principal's  liability, 
when  applied  to  cases  in  which  the  seller  deals  with  the 
agent  relying  upon  the  existence  of  an  undisclosed  principal, 
is  not  to  be  applied  in  those  in  which  the  seller  has  given 
credit  solely  to  the  agent,  supposing  him  to  be  the  principal. 

16 


242      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

This  case  decides  that  the  principal  is  not  liable  when  the 
seller  has  dealt  with  the  agent  supposing  hitn  to  be  the 
principal,  if  he  has  in  good  faith  paid  the  agent  at  a  time 
when  the  seller  still  gave  credit  to  the  agent,  and  knew  of 
no  one  else.  See  also  Irvine  v.  Watson,  5  Q.  B.  D.  102. 1 
Under  such  circumstances  it  is  immaterial  that  the  principal 
has  not  been  misled  by  the  seller's  conduct  or  laches  into 
paying  or  settling  with  his  agent.  It  is  enough  to  absolve 
him  from  liability  that  he  has  in  good  faith  paid  or  settled 
with  his  agent.  In  that  case  the  court  was  dealing  with  a 
contract  made  by  an  agent  which  was  within  the  scope  of  the 
authority  conferred  on  him,  but  which  was  nevertheless 
made  by  the  agent  as  though  he  were  acting  for  himself  as 
principal. 

In  the  present  case  Gibson  had  no  authority  at  all  to  make 
a  purchase  upon  the  credit  of  the  appellant.  But  as  it  ap- 
pears that  appellant,  in  the  monthly  settlements  of  account 
with  Gibson,  allowed  him  out  of  the  earnings  charges  for 
supplies  for  which  the  latter  had  not  actually  paid,  he  must 
be  deemed  to  have  authorized  Gibson  to  purchase  supplies 
for  him  upon  Gibson's  own  credit.  Under  the  circumstances, 
if  Gibson  had  purchased  supplies,  purporting  to  act  as  an 
agent  of  appellant  in  doing  so,  appellant,  by  consenting  to 
their  being  used  for  his  benefit,  and  by  allowing  the  price  in 
his  settlements  with  Gibson,  would  have  been  liable  to  those 
who  sold  to  him  upon  the  theorj*  of  ratification.  But,  as 
Gibson  did  not  assume  to  act  as  agent  in  making  the 
purchases,  there  is  no  basis  for  applying  the  doctrine  of 
ratification. 

Very  different  considerations  govern  the  case  in  which  an 
agent  who  assumes  to  represent  an  undisclosed  principal 
buys  of  a  seller  upon  credit,  and  one  in  which  the  agent 
assumes  to  be  acting  for  himself,  and  the  seller  deals  with 
him,  and  gives  him  exclusive  credit,  supposing  him  to  be  the 
only  principal.    In  the  first,  if  the  agent  has  authority,  ex- 

1  The  court  overlooks  the  appeal  in  this  case,  L.  R.  5  Q.  B.  D.  414, 
ante,  p.  237. 


§  125.]  FRADLEY  V.   HYLAND.  243 

press  or  implied,  to  buy  upon  credit  for  the  principal,  or 
ostensible  authority  to  do  so,  upon  which  the  seller  relies, 
then,  by  the  familiar  rules  of  law,  the  contract  is  the  con- 
tract of  the  principal,  and  is  none  the  less  so  because  the 
name  of  the  principal  does  not  happen  to  have  been  dis- 
closed. The  principal  is  bound  by  the  acts  of  his  agent 
within  the  scope  of  his  real  or  apparent  authority ;  and  the 
seller  understands  that,  even  though  he  may  hold  the  agent 
personally  responsible,  he  may  also  resort  to  the  undisclosed 
principal.  But  in  the  other,  as  the  seller  does  not  rely  upon 
an}T  ostensible  authorit}*  of  the  one  with  whom  he  contracts 
to  represent  a  third  person,  he  can  only  resort  to  the  third 
person  as  principal,  and  charge  him  as  suuh,  when  the  pur- 
chase is  made  b}'  one  having  lawful  authority  to  bind  the 
third  person.  It  is  immaterial,  in  such  a  case,  whether  the 
contract  is  made  by  an  agent  who  is  employed,  in  a  con- 
tinuous employment  or  in  a  single  transaction,  by  a  principal, 
or  whether  he  is  one  who  may  be  deemed  a  general,  instead 
of  a  special  agent.  "  When  the  agency  is  not  held  out  by 
the  principal  b}*  any  acts  or  declarations  or  implications  to 
be  general  in  regard  to  the  particular  act  or  business,  it  must 
from  necessity  be  construed  according  to  its  real  nature  and 
extent ;  and  the  other  party  must  act  at  his  own  peril,  and  is 
bound  to  inquire  into  the  nature  and  extent  of  the  authority 
actually  conferred.  In  such  a  case  there  is  no  ground  to 
contend  that  the  principal  ought  to  be  bound  by  the  acts  of 
the  agent  be}ond  what  he  has  apparently  authorized,  because 
he  has  not  misled  the  confidence  of  the  other  party  who  has 
dealt  with  the  agent."     Story  on  Agency,  §  133. 

It  is  therefore  difficult  to  understand  how,  as  an  original 
proposition,  it  could  be  reasonably  maintained  that  there  is 
any  liability  on  the  part  of  one  who  has  employed  another  to 
manage  his  interests  in  a  business,  or  series  of  transactions, 
in  which,  as  an  incident,  purchases  of  goods  are  to  be  made, 
has  given  him  instructions  not  to  purchase  on  credit,  and 
has  supplied  him  with  funds  to  purchase  for  cash,  to  a  seller 
who  has  sold  to  the  person  employed  upon  credit,  and  dealt 


244      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

with  him  as  the  only  principal.  Taft  v.  Baker,  100  Mass. 
68.  Of  course  he  would  be  liable,  and  the  instructions  not 
to  buy  on  credit  would  go  for  nothing,  if  he  did  not  supply 
the  agent  with  funds  to  pay  for  the  necessar}'  goods,  because 
in  that  case  the  agent  would  have  implied  authority  to  buy 
them  on  credit.  So  also  in  a  case  which  may  be  supposed, 
where  a  principal  knows,  or  ought  to  know,  that  the  agent 
is  buying  on  credit  in  his  own  name,  yet  the  principal  takes 
all  the  income  of  the  business  without  making  any  provision 
for  payment  to  those  who  have  trusted  the  agent,  the  prin- 
cipal would  be  liable,  because  in  such  a  case  his  conduct 
would  be  inconsistent  with  good  faith,  and  he  ought  not  to 
be  permitted  to  avail  himself  of  the  benefits  without  incurring 
full  responsibility  for  the  agent's  acts. 

But  it  is  probably  too  late  to  consider  the  questions  thus 
suggested  upon  principle ;  and  it  may  be  accepted  as  law 
that  the  seller,  under  the  circumstances  of  a  case  like  the 
present,  upon  discovery  of  the  principal,  can  resort  to  and 
recover  of  him,  if  he  [the  principal]  has  not  bond  fide  paid 
the  agent  in  the  meantime,  or  has  not  made  such  a  change 
in  the  state  of  the  account  between  the  agent  and  himself 
that  he  would  suffer  loss  if  he  should  be  compelled  to  pay 
the  seller.  Story  on  Agency,  §  291 ;  1  Parsons  on  Cont.  63  ; 
Fish  v.  Wood,  4  E.  D.  Smith,  327 ;  Thomas  v.  Atkinson,  38 
Ind.  248;  Clealand  v.  Walker,  11  Ala.  1058;  McCullough 
v.  Thompson,  45  N.  Y.  Super.  Ct.  449  ;  Laing  v.  Butler, 
37  Hun,  144.  In  the  case  last  cited  the  court  used  this 
language :  — 

"  Where  the  purchase  has  been  made  by  the  agent  upon 
credit  authorized  by  the  principal,  but  without  disclosing  his 
name,  and  payment  is  subsequently  made  bj*  the  principal 
to  the  agent  in  good  faith  before  the  agency  is  disclosed  to 
the  seller,  then  the  principal  would  not  be  liable." 

According  to  these  authorities,  if  it  should  be  conceded 
that  the  facts  in  the  present  case  warrant  the  inference  that 
the  appellant  gave  Gibson  authority  to  buy  either  upon  his 
own  credit  or  upon  the  credit  of  the  appellant,  the  libellant 


§  125.]  LAING  V.  BUTLER.  245 

cannot  recover.  It  certainly  is  not  material  that  the  ap- 
pellant did  not  pay  Gibson,  or  make  any  settlement  with 
him,  on  account  of  the  libellant's  demands  specifically.  It 
is  enough  that  he  did  settle  with  Gibson  for,  and  allowed 
him  to  retain  in  his  hands  sufficient  monej'S  to  pajT,  all  out- 
standing liabilities  contracted  bj-  him  for  the  appellant's 
benefit,  including  the  demands  of  the  libellant.  At  the  time 
of  the  last  settlement  the  appellant  had  paid  the  libellant's 
demands  and  all  outstanding  liabilities  contracted  by  Gibson 
as  between  Gibson  and  himself,  and  this  was  before  the 
libellant  knew  any  principal  in  the  purchases  other  than 
Gibson  himself. 

(The  court  then  decides  that  the  second  cause  of  action  is 
not  enforceable  in  admiralty.) 

Libel  dismissed. 


§  125.]  LAING  v.  BUTLER. 

37  Hun  (N.  Y.  S.  C),  144.  — 1885. 

Action  to  recover  the  price  of  certain  hides  sold  to  one 
Smith,  ostensibly  for  himself,  but  really  for  the  defendants 
as  undisclosed  principals.  Defendants  had  supplied  Smith 
with  funds  for  the  purchase  of  the  hides.  Judgment  for 
plaintiff.     Defendants  appeal. 

Haight,  J.  (after  discussing  various  authorities1).  It 
appears  to  us  that  where  an  agent  buys  in  his  own  name, 
but  for  the  benefit  of  his  principal,  without  disclosing  the 
name  of  the  principal,  the  rule  is  that  the  principal  as  well 
as  the  agent  will  be  bound,  provided  the  goods  are  received 

1  Dunlap's  Paley  on  Agency,  pp.  245-250;  Story  on  Agency,  §  291  ; 
1  Parsons  on  Cont.  p.  63 ;  Armstrong  v.  Stokes,  L.  R.  7  Q.  B.  598 ;  Innne 
v.  Watson,  L.  R.  5  Q.  B.  D.  102,414;  Davison  v.  Donaldson,  L.  R.  9 
Q.  B.  D.  623;  Clealand  v.  Walker,  11  Ala.  1058;  Komorowski  y.  Krun- 
dick,  56  Wis.  23  ;  Toft  v.  Baker,  100  Mass.  68 ;  Fish  v.  Wood,  4  E.  D. 
Smith,  327;  Jaqttes  v.  Todd,  3  Wend.  83-94;  McCullough  v.  Thompson, 
45  N.  Y.  Super.  Ct.  449 ;  Knapp  v.  Simon,  96  N.  Y.  284-288. 


246      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

by  the  principal,  if  the  agent  in  making  the  purchase  acted 
within  his  power  as  agent ;  but  that  this  rule  is  subject  to 
the  following  limitations  and  exceptions:  First.  The  pur- 
chase of  the  agent  must  be  within  the  power  conferred  upon 
him  by  his  principal,  or  it  must  be  shown  that  the  principal 
has  subsequently  ratified  his  acts ;  Second.  If  the  principal 
furnished  the  agent  with  the  money  with  which  to  make  the 
purchase  before  the  purchase,  and  the  agent  should,  without 
his  knowledge,  purchase  the  property  upon  credit,  without 
disclosing  his  principal,  that  the  principal  will  not  be  bound  ; 
and,  Third.  Where  the  purchase  has  been  made  b}T  the  agent 
upon  credit,  authorized  by  the  principal,  but  without  dis- 
closing his  name,  and  pajment  is  subsequently  made  b}*  the 
principal  to  the  agent  in  good  faith  before  the  agency  is  dis- 
closed to  the  seller,  then  the  principal  would  not  be  liable. 
In  the  case  under  consideration  it  appears  that  the  defend- 
ants authorized  Smith  to  purchase  the  hides  for  them ;  that 
they  advanced  the  money  to  him  with  which  to  make  the 
purchases  they  had  authorized.  The  plaintiff,  in  selling  the 
hides  to  Smith,  sold  to  him  upon  his  individual  credit  and 
promise  to  pa}'.  The  case  therefore  appears  to  us  to  be 
within  the  exceptions  to  the  rule  mentioned,  and  it  conse- 
quently follows  that  the  plaintiff  is  not  entitled  to  recover. 

Judgment  reversed  and  a  new  trial  ordered. 


3.  Same :  exception  based  on  election. 

§  126.]  BEYMER  v.   BONSALL. 

79  Pennsylvania  State,  298.  — 1875. 

Assumpsit  for  breach  of  contract  to  deliver  a  quantity  of 
petroleum.    Judgment  for  plaintiff.    Defendant  brings  error. 

Plaintiff  made  the  contract  with  brokers  who  were  acting 
for  defendant  as  undisclosed  principal.  Plaintiff  brought  an 
action  against  the  brokers,  and  had  judgment  against  them. 


§  126.]  KINGSLEY  V.   DAVIS.  247 

Defendant  pleaded  this  judgment,  and  plaintiff  demurred 
to  the  plea.  The  court  reserved  the  point,  and  entered 
judgment  upon  the  verdict  of  the  jury. 

Per  Curiam.  Undoubtedly  an  agent  who  makes  a  con- 
tract in  his  own  name  without  disclosing  his  agency  is  liable 
to  the  other  party.  The  latter  acts  upon  his  credit,  and  is 
not  bound  to  yield  up  his  right  to  hold  the  former  personalty, 
merely  because  he  discloses  a  principal  who  is  also  liable. 
The  principal  is  liable  because  the  contract  was  for  his 
benefit,  and  the  agent  is  benefited  by  his  being  presumedly 
the  creditor,  for  there  can  be  but  one  satisfaction.  But  it 
does  not  follow  that  the  agent  can  afterwards  discharge 
himself  by  putting  the  creditor  to  his  election.  Being  already 
liable  by  his  contract,  he  can  be  discharged  only  b}y  satisfac- 
tion of  it,  by  himself  or  another.  So  the  principal  has  no 
right  to  compel  the  creditor  to  elect  his  action,  or  to  dis- 
charge either  himself  or  his  agent,  but  can  defend  his  agent 
only  by  making  satisfaction  for  him.  We  think  no  error  was 
committed  by  the  court  below,  except  in  the  form  of  the 
reservation.  Judgment  should  have  been  given  directly  on 
the  demurrer  itself,  and  not  by  way  of  a  reserved  point  upon 
it.  This,  however,  is  not  a  substantial  error,  and  judgment 
may  be  treated  as  entered  upon  the  demurrer. 

Judgment  affirmed. 


§  126]  KINGSLEY  v.  DAVIS. 

104  Massachusetts,  178.  — 1870. 

Contract,  by  brokers  for  commissions.  Submitted  to  the 
court  upon  agreed  facts. 

Plaintiffs  supposed  they  were  acting  for  John  J.  Davis, 
whereas  in  fact  the  property  sold  by  them  belonged  to  his 
wife,  the  defendant.  After  learning  this  fact  plaintiffs  had 
taken  judgment  against  John  J.  Davis,  and  had  issued  an 
execution  upon  it ;  but  the  judgment  remained  unsatisfied. 


248      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

Morton,  J.  .  .  .  But  the  true  inference  to  be  drawn  from 
the  facts  stated  undoubtedly  is,  that  the  plaintiffs  contracted 
with,  and  gave  credit  to,  John  J.  Davis  ;  and  they  now  claim 
that  he  was  acting  as  the  agent  of  the  defendant,  and  that  they 
gave  him  credit  in  ignorance  of  this  fact.  If  we  assume  that 
he  was  acting  as  her  agent  in  contracting  with  the  plaintiffs, 
yet  there  is  an  insuperable  obstacle  to  their  right  to  maintain 
this  action.  The  general  principle  is  undisputed,  that,  when 
a  person  contracts  with  another  who  is  in  fact  an  agent  of  an 
undisclosed  principal,  he  may,  upon  discover}'  of  the  princi- 
pal, resort  to  him,  or  to  the  agent  with  whom  he  dealt,  at  his 
election.  But  if,  after  having  come  to  a  knowledge  of  all  the 
facts,  he  elects  to  hold  the  agent,  he  cannot  afterwards  resort 
to  the  principal.  In  the  case  at  bar,  it  is  admitted  that  the 
plaintiffs,  after  all  the  facts  became  known  to  them,  obtained 
a  judgment  against  John  J.  Davis  upon  the  same  cause  of 
action  for  which  this  suit  is  brought.  We  are  of  opinion 
that  this  was  conclusive  evidence  of  an  election  to  resort  to 
the  agent,  to  whom  the  credit  was  originally  given,  and  is  a 
bar  to  this  action  against  the  principal.  Raymond  v.  Crown 
&  Eagle  Mills,  2  Met.  319. 

Judgment  for  the  defendant. 


4.     Same  :  exception  as  to  sealed  instruments. 

§127.]  BRIGGS  v.  PARTRIDGE. 

64  New  York,  357.— 1876. 

Action  to  recover  the  purchase  price  unpaid  under  a  con- 
tract for  the  purchase  and  sale  of  lands.  Complaint  dis- 
missed.    Plaintiff  appeals. 

The  complaint  and  the  opening  remarks  of  plaintiffs  coun- 
sel at  the  trial  alleged  that  the  contract  was  under  seal ; 
that  it  was  signed  b}r  one  Hurlburd ;  that  defendant  Part- 
ridge's name  did  not  appear  in  the  instrument;  but  that 
plaintiff  would  prove  that  Hurlburd  was  acting  solely  for 


§  127.]  BRIGGS  V.   PARTRIDGE.  249 

Partridge  under  a  parol  authority;  and  that  Partridge  had 
paid  or  caused  to  be  paid  the  sum  of  $100  on  the  delivery  of 
the  instrument  Defendant's  counsel  moved  to  dismiss  the 
complaint  on  the  ground  that  the  facts  stated  did  not  consti- 
tute a  cause  of  action,  and  that  it  was  not  competent  to  vary 
the  terms  of  the  instrument  by  parol  proof  that  the  party 
signing  it  as  principal  was  not  a  principal,  but  an  agent. 
The  court  granted  the  motion. 

Andrews,  J.  .  .  .  The  real  question  is,  can  the  vendor,  in  a 
sealed  executory  agreement,  inter  partes,  for  the  sale  of  land, 
enforce  it  as  the  simple  contract  of  a  person  not  mentioned  in 
or  a  party  to  the  instrument,  on  proof  that  the  vendee  named 
therein,  and  who  signed  and  sealed  it  as  his  contract,  had 
oral  authority  from  such  third  person  to  enter  into  the  con- 
tract of  purchase,  and  acted  as  his  agent  in  the  transaction ; 
and  can  the  vendor  on  this  proof,  there  having  been  no 
default  on  his  part,  and  he  being  ready  and  willing  to  convey, 
recover  of  such  third  person  the  unpaid  purchase  money? 
This  question  here  arises  in  a  case  where  the  vendor,  so  far 
as  it  appears,  has  remained  in  possession  of  the  land,  and 
where  no  act  of  ratification  of  the  contract  by  the  undisclosed 
principal  has  been  shown.  It  is  not  disputed,  and  indeed  it 
cannot  be,  that  Hurlburd  is  bound  to  the  plaintiff  as  cove- 
nantor, upon  the  covenants  in  the  agreement.  He  covenants 
for  himself  and  not  for  another,  to  pay  the  purchase  money, 
and  by  his  own  seal  fixes  the  character  of  the  obligation  as  a 
specialty.  He  is  liable  to  perform  the  contract  irrespective  of 
the  fact  whether  it  can  be  enforced  against  his  nominal  prin- 
cipal. On  the  other  hand  it  is  equally  clear  that  Hurlburd's 
covenant  cannot  be  treated  as,  or  made  the  covenant  of  the 
defendant.  Those  persons  only  can  be  sued  on  an  indenture 
who  are  named  as  parties  to  it,  and  an  action  will  not  lie 
against  one  person  on  a  covenant  which  purports  to  have 
been  made  by  another.  Beckham  v.  Drake,  9  M.  &  W. 
79  ;  Spencer  v.  Field,  10  Wend.  88  ;  Townsend  v.  Hubbard, 
4  Hill,  351. 

In  the  case  last  cited,  it  was  held  that  where  an  agent  duly 


250      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

authorized  to  enter  into  a  sealed  contract  for  the  sale  of  the 
land  of  his  principals,  had  entered  into  a  contract  under  his 
own  name  and  seal,  intending  to  execute  the  authority  con- 
ferred upon  him,  the  principals  could  not  treat  the  covenants 
made  by  the  agent  as  theirs,  although  it  clearly  appeared  in 
the  body  of  the  contract  that  the  stipulations  were  intended 
to  be  between  the  principals  and  purchasers  and  not  between 
the  vendees  and  the  agent.  The  plaintiffs  in  that  case  were 
the  owners  of  the  land  embraced  in  the  contract,  and  brought 
their  action  in  covenant  to  enforce  the  covenant  of  the  ven- 
dees to  pay  the  purchase  money,  and  the  court  decided  that 
there  was  no  reciprocal  covenant  on  the  part  of  the  vendors 
to  sell,  and  that  for  want  of  mutuality  in  the  agreement  the 
action  could  not  be  maintained.  It  is  clear,  that  unless  the 
plaintiff  can  pass  by  the  persons  with  whom  he  contracted, 
and  treat  the  contract  as  the  simple  contract  of  the  defendant, 
for  whom  it  now  appears  that  Hurlburd  was  acting,  this 
action  must  fail.  The  plaintiff  invokes  in  his  behalf  the  doc- 
trine that  must  now  be  deemed  to  be  the  settled  law  of  this 
court,  and  which  is  supported  by  high  authority  elsewhere, 
that  a  principal  may  be  charged  upon  a  written  parol  execu- 
tor}' contract  entered  into  by  an  agent  in  his  own  name,  within 
his  authority,  although  the  name  of  the  principal  does  not 
appear  in  the  instrument,  and  was  not  disclosed,  and  the 
party  dealing  with  the  agent  supposed  he  was  acting  for  him- 
self, and  this  doctrine  obtains  as  well  in  respect  to  contracts 
which  are  required  to  be  in  writing,  as  to  those  where  a  writ- 
ing is  not  essential  to  their  validity.  Higgins  v.  Senior,  8 
M.  &  W.  834;  Trueman  v.  Loder,  11  Ad.  &  El.  589; 
Dykers  v.  Townsend,  24  N.  Y.  57 ;  Coleman  v.  First  Nat. 
Bank  of  Elmira,  53  N.  Y.  388 ;  Ford  v.  Williams,  21  How. 
289  ;  Huntington  v.  Knox,  7  Cush.  371 ;  The  Eastern  R. 
JR.  Co.  v.  Benedict,  5  Gray,  561 ;  Hubbert  v.  Borden,  6 
Wharton,  79  ;  Browning  v.  Provincial  Ins.  Co.,  5  L.  R. 
(P.  C.)  263  ;  Calder  v.  Dobell,  6  L.  R.  (C.  P.)  486  ;  Story 
on  Agency,  §§  148,  160. 

It  is,  doubtless,  somewhat  difficult  to  reconcile  the  doctrine 


§  127.]  BRIGGS  V.  PARTRIDGE.  251 

here  stated  with  the  rule  that  parol  evidence  is  inadmissible 
to  change,  enlarge,  or  vary  a  written  contract,  and  the  argu- 
ment upon  which  it  is  supported  savors  of  subtlety  and 
refinement.  In  some  of  the  earlier  cases  the  doctrine  that  a 
written  contract  of  the  agent  could  be  enforced  against  the 
principal,  was  stated  with  the  qualification,  that  it  applied 
when  it  could  be  collected  from  the  whole  instrument,  that 
the  intention  was  to  bind  the  principal.  But  it  will  appear 
from  an  examination  of  the  cases  cited,  that  this  qualification 
is  no  longer  regarded  as  an  essential  part  of  the  doctrine. 
Whatever  ground  there  may  have  been  originally  to  question 
the  legal  soundness  of  the  doctrine  referred  to,  it  is  now  too 
firmly  established  to  be  overthrown,  and  I  am  of  opinion,  that 
the  practical  effect  of  the  rule  as  now  declared  is  to  promote 
justice  and  fair  dealing.  There  i3  a  well-recognized  excep- 
tion to  the  rule  in  the  case  of  notes  and  bills  of  exchange, 
resting  upon  the  law  merchant.  Persons  dealing  with  nego- 
tiable instruments  are  presumed  to  take  them  on  the  credit  of 
the  parties  whose  names  appear  upon  them  ;  and  a  person  not 
a  party  cannot  be  charged  upon  proof  that  the  ostensible 
party  signed  or  indorsed  as  his  agent.  Barker  v.  Mechanics' 
Ins.  Co.,  3  Wend.  94;  Pentz  v.  Stanton,  10  Id.  271 ;  De 
Witt  v.  Walton,  9  N.  Y.  571 ;  Stackpole  v.  Arnold,  11 
Mass.  27 ;  Eastern  B.  R.  Co.  v.  Benedict,  5  Gray,  561 ; 
Beckham  v.  Drake,  9  M.  &  W.  79.  That  Hurlburd  had 
oral  authority  from  the  defendant  to  enter  into  a  contract  for 
the  purchase  of  the  land,  and  that  he  was  acting  for  the 
defendant  in  making  it  is  admitted  ;  and  if  the  contract  had 
been  a  simple  contract  and  not  a  specialty  the  defendant 
would,  I  think,  have  been  bound  by  it  within  the  authorities 
cited.  No  question  would  arise  under  the  Statute  of  Frauds, 
for  the  statute  prescribing  what  shall  be  necessary  to  make  a 
valid  contract  for  the  sale  of  lands  requires  only  that  the  con- 
tract, or  some  note  or  memorandum  thereof  expressing  the 
consideration,  should  be  in  writing  and  subscribed  by  the 
party  by  whom  the  sale  is  to  be  made,  or  his  agent  lawfully 
authorized.    2  R.  S.  135,  §§  8,  9.    In  this  case  the  contract 


252     CONTRACT  FOB  UNDISCLOSED  PftINCD?AL.      [CH.  X. 

was  signed  by  the  vendors  ;  and  even  if  it  had  been  executed 
on  their  part  by  an  agent  pursuant  to  an  oral  authority,  it 
would  have  been  a  valid  execution  within  the  statute.  Law- 
rence v.  Taylor,  5  Hill,  107 ;  Worrall  v.  Munn,  1  Seld.  229. 
But  the  vendee's  contract  need  not  be  in  writing.  Mc  Crea  v. 
Purmort,  16  Wend.  460. 

We  return,  then,  to  the  question  originally  stated.  Can 
a  contract  under  seal,  made  bj-  an  agent  in  his  own  name  for 
the  purchase  of  land,  be  enforced  as  the  simple  contract 
of  the  real  principal  when  he  shall  be  discovered?  No 
authority  for  this  broad  proposition  has  been  cited.  There 
are  cases  which  hold  that  when  a  sealed  contract  has  been 
executed  in  such  form,  that  it  is,  in  law,  the  contract  of  the 
agent  and  not  of  the  principal,  but  the  principal's  interest  in 
the  contract  appears  upon  its  face,  and  he  has  received  the 
benefit  of  performance  by  the  other  party,  and  has  ratified 
and  confirmed  it  by  acts  in  pais,  and  the  contract  is  one 
which  would  have  been  valid  without  a  seal,  the  principal 
may  be  liable  in  assumpsit  upon  the  promise  contained  in  the 
instrument,  which  may  be  resorted  to  to  ascertain  the  terms 
of  the  agreement.  Randall  v.  Van  Vechten,  19  John.  60 ; 
Du  Bois  v.  The  Del.  &  Hudson  Canal  Co.,  4  Wend.  285 ; 
Lawrence  v.  Taylor,  5  Hill,  107 ;  see  also  Evans  v.  Wells, 
22  Wend.  324  ;  Woirrall  v.  Munn,  supra  ;  Story  on  Agency, 
§  277 ;  1  Am.  Leading  Cases,  735,  note. 

The  plaintiffs  agreement  in  the  case  was  with  Hurlburd, 
and  not  with  the  defendant.  The  plaintiff  has  recourse 
against  Hurlburd  on  his  covenant,  which  was  the  only 
remedy  which  he  contemplated  when  the  agreement  was 
made.  No  ratification  of  the  contract  by  the  defendant  is 
shown.  To  change  it  from  a  specialty  to  a  simple  contract, 
in  order  to  charge  the  defendant,  is  to  make  a  different  con- 
tract from  the  one  the  parties  intended.  A  seal  has  lost 
most  of  its  former  significance,  but  the  distinction  between 
specialties  and  simple  contracts  is  not  obliterated.  A  seal 
is  still  evidence,  though  not  conclusive  of  a  consideration. 
The  rule  of  limitation  in  respect  to  the  two  classes  of 


§  129.]  HUNTINGTON  V.  KNOX.  253 

obligations  is  not  the  same.  We  find  no  authority  for  the 
proposition  that  a  contract  under  seal  may  be  turned  into 
the  simple  contract  of  a  person  not  in  any  way  appearing 
on  its  face  to  be  a  party  to,  or  interested  in  it,  on  proof 
dehors  the  instrument,  that  the  nominal  party  was  acting  as 
the  agent  of  another,  and  especially  in  the  absence  of  any 
proof  that  the  alleged  principal  has  received  any  benefit 
from  it,  or  has  in  any  way  ratified  it,  and  we  do  not  feel  at 
liberty  to  extend  the  doctrine  applied  to  simple  contracts 
executed  bjr  an  agent  for  an  unnamed  principal  so  as  to 
embrace  this  case.  The  general  rule  is  declared  b}T  Shaw, 
C.  J.,  in  Huntington  v.  Knox,  7  Cush.  371 :  "  Where  a 
contract  is  made  by  deed,  under  seal  on  technical  grounds, 
no  one  but  a  party  to  the  deed  is  liable  to  be  sued  upon  it, 
and,  therefore,  if  made  by  an  attorney  or  agent,  it  must  be 
made  in  the  name  of  the  principal,  in  order  that  he  may  be  a 
part}7,  because  otherwise  he  is  not  bound  by  it." 

The  judgment  of  the  General  Term  should  be  affirmed. 

All  concur.  Judgment  affirmed. 


5     Same :  exception  as  to  negotiable  instruments. 

§  128.]  RENDELL  v.   HARRIMAN. 

75  Maine,  497. —1883. 
[Reported  herein  at  p.  360.] 


6.  Rights  of  undisclosed  principal:  general  rule. 

§  129.]  HUNTINGTON  v.   KNOX. 

7  Cushing  (Mass.),  371.  — 1851. 

Assumpsit  for  goods  sold  and  delivered.  Award  by 
arbitrator  in  favor  of  plaintiff,  subject  to  the  opinion  of 
the  court  on  questions  of  law. 


254     CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

George  H.  Huntington  entered  into  the  contract  in  writing 
with  the  defendant.  Plaintiff  offered  to  prove  that  the  bark 
was  her  property,  and  that  George  H.  Huntington  entered 
into  the  contract  in  his  name  as  her  agent.  The  arbitrator 
ruled  that  such  parol  evidence  was  competent,  and  that  the 
evidence  established  the  facts  as  alleged. 

Shaw,  C.  J.  This  action  is  brought  to  recover  the  value 
of  a  quantity  of  hemlock  bark,  alleged  to  have  been  sold  by 
the  plaintiff  to  the  defendant,  at  certain  prices  charged.  The 
declaration  was  for  goods  sold  and  delivered,  with  the  usual 
money  counts.  The  case  was  submitted  to  a  referee  by  a 
common  rule  of  the  court,  who  made  an  award  in  favor  of 
the  plaintiff,  subject  to  the  opinion  of  the  court  on  questions 
reserved,  stating  the  facts  in  his  report,  on  which  the  decision 
of  those  questions  depends. 

The  facts  tended  to  show  that  the  bark  was  the  property 
of  the  plaintiff ;  that  the  contract  for  the  sale  of  it  was  made 
by  her  agent,  George  H.  Huntington,  bjr  her  authority  ;  that 
it  was  made  in  writing  b}'  the  agent,  in  his  own  name,  not 
stating  his  agency,  or  naming  or  referring  to  the  plaintiff,  or 
otherwise  intimating,  in  the  written  contract,  that  any  other 
person  than  the  agent  was  interested  in  the  bark. 

Objection  was  made,  before  the  referee,  to  the  admission 
of  parol  evidence,  and  to  the  right  of  the  plaintiff  to  maintain 
the  action  in  her  own  ncme.  The  referee  decided  both  points 
in  favor  of  the  plaintiff,  holding  that  the  action  could  be  main- 
tained b}'  the  principal  and  owner  of  the  property,  subject  to 
an}-  set-off,  or  other  equitable  defence  which  the  buyer  might 
have  if  the  action  were  brought  by  the  agent. 

The  court  are  of  opinion  that  this  decision  was  correct  upou 
both  points.  Indeed,  they  resolve  themselves  substantially 
into  one ;  for  prima  facie,  and  looking  only  at  the  paper 
itself,  the  property  is  sold  by  the  agent,  on  credit ;  and  in 
the  absence  of  all  other  proof,  a  promise  of  payment  to  the 
seller  would  be  implied  by  law ;  and  if  that  presumption  of 
fact  can  be  controverted,  so  as  to  raise  a  promise  to  the 
principal  b}T  implication,  it  must  be  b}'  evidence  aliunde, 
proving  the  agency  and  property  in  the  principal. 


§  129.]  HUNTINGTON  V.   KNOX.  255 

It  is  now  well  settled, by  authorities  that  when  the  property 
of  one :  is  sold  by  anothert  as  agentT  if  the  principal  give 
notice  to  the  purchaser,  before  payment,  to  pay  to  himself. 
and  not  to  the  agpnt,  the,  purchaser  is  bound  to  pay  the 
principal,  subject  to  any  equities  of  the  purchaser  against 
the  agent. 

When  a  contract  is  made  by  deed  under  seal,  on  technical 
grounds,  no  one  but  a  party  to  the  deed  is  liable  to  be  sued 
upon  it ;  and,  therefore,  if  made  by  an  agent  or  attorney,  it 
must  be  made  in  the  name  of  the  principal,  in  order  that  he 
may  be  a  party,  hpo.*"**  nt,||prwiCo  i1fi  js  pot  hound  hy  jf.. 

But  a  different  rule,  and  a  far  more  liberal  doctrine,  pre- 
vails  in  regard  to  a  written  contract  not  under  seal.  In  the 
case  of  Hx g gins  v.  Senior,  8  M.  &  W.  884,  it  is  laid 
down  as  a  general  proposition,  that  it  is  competent  to  show 
that  one  or  both  of  the  contracting  parties  were  agents  for 
other  persons,  and  acted  as  such  agents  in  making  the  con- 
tract of  sale,  so  as  to  give  the  benefit  of  the  contract,  on  the 
one  hand  to,  and  charge  with  liability  on  the  other,  the  un- 
named principals  ;  and  this  whether  the  agreement  be  or  be 
not  required  to  be  in  writing,  by  the  Statute  of  Frauds.  But 
the  court  mark  the  distinction  broadly  between  such  a  case 
and  a  case  where  an  agent,  who  has  contracted  in  his  own 
name,  for  the  benefit,  and  by  the  authority,  of  a  principal, 
seeks  to  discharge  himself  from  liability,  on  the  ground  that 
he  contracted  in  the  capacity  of  an  agent.  The  doctrine 
proceeds  on  the  ground  that  the  principal  an^  agent  may 
each  be  bound :  the  agent,  because  by  his  contract  and 
promise  he  has  expressly  bound  himselfj  and  the  principal, 
because  it  was  a  contract,  madp  by  his  authority  for  his 
account.  Paterson  v.  Gandasequi,  15  East,  62;  Magee  v. 
Atkx\„yn,  2  M.  &  W.  440;  Trueman  v.  Loder,  11  Ad.  & 
El.  589;  Taintor  v.  Prendergast,  3  Hill,  72;  Edwards  v. 
Golding,  20  Vt.  30.  It  is  analogous  to  the  ordinarj*  case 
of  a  dormant  partner.  He  is  not  named  or  alluded  to  in  the 
contract ;  yet  as  the  contract  is  shown  in  fact  to  be  made  for 
his  benefit,  and  by  his  authority,  he  is  liable. 


256      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

So,  on  the  other  hand,  where  the  contract  is  made  for  the 
benefit  of  one  not  named,  though  in  writing,  the  latter  may 
sue  on  the  contract,  jointly  with  others,  or  alone,  according 
to  the  interest.  Garrett  v.  Handley,  4  B.  &  C.  664 ;  Sad- 
ler v.  Leigh,  4  Campb.  195  ;  Coppin  v.  Walker,  7  Taunt.  237  ; 
Story  on  Agency,  §  410.  The  rights  and  liabilities  of  a  prin- 
cipal, upon  a  written  instrument  executed  by  his  agent,  do 
not  depend  upon  the  fact  of  the  agency  appearing  on  the  in- 
strument itself,  but  upon  the  facts  :  (1)  that  the  act  is  done  in 
the  exercise,  and  (2)  within  the  limits,  of  the  powers  dele- 
gated ;  and  these  are  necessarily  inquirable  into  by  evidence. 
Mechanics'  Bank  v.  Bank  of  Columbia,  5  Wheat.  326. 

And  we  think  this  doctrine  is  not  controverted  by  the 
authority  of  an}'  of  the  cases  cited  in  the  defendant's  argu- 
ment. Hastings  v.  Lovering,  2  Pick.  214,  was  a  case  where 
the  suit  was  brought  against  an  agent,  on  a  contract  of  war- 
rant}" upon  a  sale  made  in  his  own  name.  The  case  of  the 
United  States  v.  Parmele,  Paine,  252,  was  decided  on  the 
ground  that,  in  an  action  on  a  written  executory  pi-omise, 
none  but  the  promisee  can  sue.  The  court  admit  that,  on  a 
sale  of  goods  made  by  a  factor,  the  principal  may  sue. 

This  action  is  not  brought  on  any  written  promise  made 
by  the  defendant ;  the  receipt  is  a  written  acknowledgment, 
given  by  the  plaintiff  to  the  defendant,  of  part  payment  for 
the  bark,  and  it  expresses  the  terms  upon  which  the  sale  had 
been  made.  The  defendant,  by  accepting  it,  admits  the  sale 
and  its  terms  ;  but  the  law  raises  the  promise  of  payment. 
And  this  is  by  implication,  prima  facie,  a  promise  to  the 
agent ;  yet  it  is  only  prima  facie,  and  may  be  controlled  by 
parol  evidence  that  the  contract  of  sale  was  for  the  sale  of 
property  belonging  to  the  plaintiff,  and  sold  by  her  authority 
to  the  defendant,  by  the  agency  of  the  person  with  whom  the 
defendant  contracted. 

We  are  all  of  opinion  that  the  provisions  of  Rev.  Sts. 
c.  28,  §  201,  do  not  apply  to  the  sale  of  bark,  as  made 
in  this  case. 

Judgment  on  the  award  for  the  plaintiff. 


§  130.]  MONTAGUE  V.   FORWOOD.  257 

7.    Same  :  exception  as  to  state  of  accounts. 

§130.]  MONTAGUE  v.  FORWOOD. 

1893,  2  Queen's  Bench  Division  (C.  A.),  351. 

Action  to  recover  a  sum  of  money  alleged  to  have  been 
received  by  the  defendants  to  the  use  of  the  plaintiffs.  Judg- 
ment for  defendants.     Plaintiffs  appeal. 

Plaintiffs  had  been  engaged  by  the  owners  of  a  cargo  to 
collect  a  general  average  loss  from  underwriters  at  Lloyd's. 
They  employed  a  merchant  firm,  Beyts  &  Craig,  who,  not 
being  members  of  Lloyd's,  employed  defendants  as  brokers. 
Defendants  collected  the  loss  and  claimed  the  right  to  set  off 
the  amount  collected  against  a  sum  due  them  from  Beyts  & 
Craig.  Defendants  had  no  notice  that  Beyts  &  Craig  were  act- 
ing as  agents,  and  believed  them  to  be  principals.  Beyts  & 
Craig  were  adjudged  bankrupt  after  the  money  was  collected. 

Lord  Esher,  M.  R.  I  feel  no  doubt  about  this  case.  The 
plaintiffs  were  directed  by  a  foreign  bank,  who  were  acting 
for  the  owners  of  the  cargo,  to  collect  a  general  average  con- 
tribution from  the  underwriters  in  England  who  had  insured 
against  a  general  average  loss.  The  plaintiffs  emplo}'ed 
Beyts  &  Craig  to  collect  the  money  from  the  insurers.  Beyts 
&  Craig,  who  are  not  brokers,  in  their  turn  employed  the  de- 
fendants as  their  agents  to  collect  the  money,  the  defendants 
being  brokers  at  Lloyd's.  Beyts  &  Craig  did  not  tell  the  de- 
fendants that  they  were  acting  as  agents  for  any  one.  Beyts 
&  Craig  were  not  brokers,  nor  had  thejr  in  any  way  the  char- 
acter of  persons  whose  business  it  was  to  act  as  agents  for 
others.  It  was  found  by  the  learned  judge  as  a  fact  that  the 
defendants  did  not  know  that  Be3ts  &  Craig  were  acting  in 
the  matter  as  agents  for  an}'  one.  The  defendants  accordingly, 
acting  as  agents  for  Bej'ts  &  Craig,  collected  the  money,  and 
at  the  ver}r  time  when  the}7  did  so  Beyts  &  Craig  were  indebted 
to  them  in  a  larger  amount.  At  that  very  time  the  defendants 
had  a  right  of  set-off  as  against  Beyts  &  Craig,  though  the 

17 


258      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.       [CH.  X. 

right  would  not  come  into  play  until  an  action  was  brought. 
After  the  defendants  had  collected  the  monej*,  and  the  right 
of  set-off  had  accrued,  the  defendants,  not  knowing,  and 
having  no  reason  to  suspect,  and  not  in  fact  suspecting,  that 
Beyts  &  Craig  were  acting  for  any  principals,  can  the  plain- 
tiffs now  intervene  and  say  that  the  money  belongs  to  them, 
and  that  the  defendants  were  not  their  agents,  and  that  the 
defendants  cannot  set  off  as  against  the  plaintiffs  a  debt  due 
to  them  from  Beyts  &  Craig?  The  law  of  bankruptcy  has 
nothing  to  do  with  the  case.  What  is  the  law  which  governs 
it?  I  think  it  was  settled  by  Rabone  v.  Williams,  7  T.  R. 
360,  n. ;  George  v.  Clagett,  7  T.  R.  359,  and  Fish  v.  Kemp- 
ton,  7  C.  B.  687. 

In  Fish  v.  Kempton,  7  C.  B.  at  p.  691,  Wilde,  C.  J., 
said:  "Where  goods  are  placed  in  the  hands  of  a  factor 
for  sale  and  are  sold  by  him  under  circumstances  that  are 
calculated  to  induce,  and  do  induce,  a  purchaser  to  believe 
that  he  is  dealing  with  his  own  goods,  the  principal  is  not 
permitted  afterwards  to  turn  round  and  tell  the  vendee  that 
the  character  he  himself  has  allowed  the  factor  to  assume  did 
not  really  belong  to  him.  The  purchaser  may  have  bought 
for  the  express  purpose  of  setting  off  the  price  of  the  goods 
against  a  debt  due  to  him  from  the  seller.  But  the  case  is 
different  where  the  purchaser  has  notice  at  the  time  that  the 
seller  is  acting  merely  as  the  agent  of  another."  And  Cress- 
well,  J.,  said  (at  p.  693) :  "  This  is  an  attempt  to  extend 
the  rule  laid  down  in  Rabone  v.  Williams,  7  T.  R.  360,  n., 
and  George  v.  Clagett,  7  T.  R.  359,  which  has  now  been  uni- 
formty  acted  upon  for  man}'  years.  If  a  factor  sells  poods 
as  owner,  and  the  buyer  bond  fide  purchases  them  in  the 
belief  that  he  is  dealing  with  the  owner,  he  may  set  off  a  debt 
due  to  him  from  the  factor  against  a  demand  preferred  by 
the  principal  Lord  Mansfield  so  lays  down  the  rule  dis- 
tinctly in  Rabone  v.  Williams,  7  T.  R.  360,  n.  '  Where/  he 
saj's,  '  a  factor,  dealing  for  a  principal,  but  concealing  that 
principal,  delivers  goods  in  his  own  name,  the  person  con- 
tracting with  him  has  a  right  to  consider  him  to  all  intents  and 


§  130.]  MONTAGUE   V.   FORWOOD.  259 

purposes  as  the  principal ;  and,  thgggfa  thfl  vpf>1  pri»r»ipni  m^ 
appear  and  brings  an  action  upon  that  contract  against  the 
purchaser  of  the  goods,  yet  that  purchaser  may  set  off  any 
claim  he  may  have  against  the  factor  in  answer  to  the  demand 
of  the  principal  This  has  been  long  settled.'  The  distinc- 
tion between  a  factor  and  a  broker  has  been  noticed  by 
Abbott,  C.  J.,  and  Bay  ley,  J.,  in  Baring  v.  Corrie,  2  B. 
&  A.  137." 

In  Fish  v.  Kempton,  7  C.  B.  687,  the  plaintiffs'  goods  had 
been  sold  to  the  defendant  by  a  factor,  that  is,  a  person 
whose  business  it  is  to  sell  in  his  own  name  goods  placed  in 
his  hands  for  that  purpose  by  his  principal ;  but  the  same 
principle  applies  to  any  one  who  is  authorized  to  sell  goods, 
or  to  receive  money  for  his  principal,  when  there  is  nothing 
to  lead  the  person  who  deals  with  him  to  suppose,  and  he  does 
not  in  fact  know,  that  he  is  acting  as  an  agent.  When  a 
person  who  sells  goods  is  known  b}r  the  purchaser  to  be  a 
broker,  that  is,  an  agent,  the  case  is  entirely  different ;  the 
purchaser  cannot  then  set  off  a  debt  due  to  him  from  the 
broker  against  the  demand  of  the  principal.  Beyts  &  Craig 
were  not  brokers,  and  the  defendants  had  no  reason  for  sup- 
posing that  they  were  acting  for  a  principal.  The}-  acted  as  if 
the  moneys  to  be  collected  would,  when  collected,  belong  to 
themselves.  It  is  found  as  a  fact  by  the  learned  judge  that 
the  defendants  did  not  know  that  Beyts  &  Craig  were  acting 
for  a  principal.  That  being  so,  they  had  a  right  at  the  moment 
when  they  received  the  money  to  set  off  against  it  a  debt  due 
to  them  by  Beyts  &  Craig,  and  if  the  plaintiffs  could  now 
intervene,  they  would  be  taking  away  from  the  defendants  a 
yalid  and  existing  right. 

Bowen,  L.  J.  I  am  of  the  same  opinion.  The  Master  of 
the  Rolls  has  so  clearly  expressed  the  law  on  the  subject  that 
I  have  really  nothing  to  add,  beyond  saying  that  I  concur  in 
his  view.  The  case  is,  in  my  judgment,  governed  by  principles 
of  the  decision  in  George  v.  Clagett,  7  T.  R.  359,  by  the  rules 
of  common  sense  and  justice,  and  I  think  also  by  the  law  of 
estoppel.     The  principle  is  not  confined  to  the  sale  of  goods. 


260      CONTRACT  FOR  UNDISCLOSED  PRINCDPAL.      [CH.  X. 

If  A.  employs  B.  as  his  agent  to  make  any  contract  for  him, 
or  to  receive  money  for  him,  and  B.  makes  a  contract  with  C, 
or  employs  C.  as  his  agent,  if  B.  is  a  person  who  would  rea- 
sonably be  supposed  to  be  acting  as  a  principal,  and  is  not 
known  or  suspected  by  C.  to  be  acting  as  an  agent  for  any 
one,  A.  cannot  make  a  demand  against  C.  without  the  latter 
being  entitled  to  stand  in  the  same  position  as  if  B.  had  in 
fact  been  a  principal.  If  A.  has  allowed  his  agent  B.  to  ap- 
pear in  the  character  of  a  principal  he  must  take  the  conse- 
quences. Here  Beyts  &  Craig  were  allowed  by  the  plaintiffs 
to  deal  with  the  defendants  as  if  they  had  been  dealing  on 
their  own  account,  and  the  defendants  who  dealt  with  Beyts 
&  Craig  are  entitled  to  stand  in  the  position  in  which  they 
would  have  stood  if  Beyts  &  Craig  had  really  been  dealing  as 
principals. 

(Kay,  L.  J.,  also  delivered  a  concurring  opinion.) 

Appeal  dismissed. 


8.     Same :   exception  where   exclusive  credit  is  given   to 

agent. 

§  132.]  WINCHESTER  v.  HOWARD. 

97  Massachusetts,  303.  — 1867. 

Contract  for  the  price  of  a  pair  of  oxen  alleged  to  have 
been  purchased  by  the  defendant  of  the  plaintiffs.  Judgment 
for  plaintiffs.     Defendant  alleged  exceptions. 

Defendant  offered  to  prove  that  one  Smith  claimed  to  be 
the  owner  of  the  oxen,  and  represented  that  plaintiffs  had  no 
interest  in  them  ;  that  relying  upon  this  representation  de- 
fendant purchased  the  oxen  of  Smith,  and  that  as  soon  as  he 
learned  that  the  representation  was  false  he  returned  the  oxen 
to  Smith,  who  refused  to  receive  them,  and  offered  defendant 
a  bill  of  sale  in  plaintiffs'  name,  which  offer  defendant  de- 
clined ;  that  defendant  would  not  willingly  have  any  dealings 
with  plaintiffs,  and  had  for  some  years  refused  to  deal  with 


§  132.]  WINCHESTER   V.   HOWARD.  261 

them.  This  proof  the  court  ruled  would  not  constitute  a  de- 
fence, and  directed  a  verdict  for  plaintiffs. 

Chapman,  J.  The  court  are  of  the  opinion  that  it  should 
have  been  left  to  the  jury  in  this  case  to  determine  whether 
the  minds  of  the  parties  really  met  upon  any  contract,  and  if 
so,  what  the  contract  was. 

It  is  true  that  an  agent  may  sell  the  property  of  his  princi- 
pal without  disclosing  the  fact  that  he  acts  as  an  agent,  or 
that  the  property  is  not  his  own  ;  and  the  principal  may  main- 
tain an  action  in  his  own  name  to  recover  the  price.  If  the 
purchaser  says  nothing  on  the  subject,  he  is  liable  to  the  un- 
known principal.  Huntington  v.  Knox,  7  Cush.  371.  But 
on  the  other  hand,  every  man  has  a  right  to  elect  what  parties 
he  will  deal  with.  As  was  remarked  by  Lord  Denman  in 
Humble  v.  Hunter,  12  Q.  B.  310,  "  You  have  a  right  to  the 
benefit  j-qu  contemplate  from  the  character,  credit,  and  sub- 
stance of_the  person  with  whom  you  contract."  There  may 
be  good  reasons  why  one  should  be  unwilling  to  buy  a  pair  of 
oxen  that  has  been  owned  or  used,  or  were  claimed  by  a  par- 
ticular person,  or  why  he  should  be  unwilling  to  have  any 
dealings  with  that  person  ;  and  as  a  man's  right  to  refuse  to 
enter  into  a  contract  is  absolute,  he  is  not  obliged  to  submit 
the  validity  of  his  reasons  to  a  court  or  jurj\ 

In  this  case  it  appears  that  Smith,  the  plaintiffs'  agent,  told 
the  defendant  that  he  had  a  pair  of  oxen  for  sale  (referring  to 
the  oxen  in  question),  and  that  another  pair  belonging  to  one 
Blanchard  were  in  his  possession,  which  pair  he  was  autho- 
rized to  sell.  A  jury  might  properly  find  that  this  amounted 
to  a  representation  that  the  oxen  in  question  were  his  own. 
The  defendant  then  made  inquiries,  in  answer  to  which  Smith 
affirmed  that  the  oxen  had  never  been  hurt ;  that  the  plain- 
tiffs had  no  mortgage  upon  them,  and  that  there  was  no  claim 
upon  them  except  the  claim  which  Smith  had.  A  jury  might 
properly  find  that  this  was,  in  substance,  a  representation 
that  the  title  to  the  oxen  was  exclusively  in  Smith,  and  that, 
as  the  defendant  was  unwilling  to  deal  with  the  plaintiffs,  he 
made  proper  inquiries  on  the  subject,  and  was  led  by  Smith 


262      CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X. 

to  believe  he  was  not  dealing  with  the  plaintiffs.  The 
defendant  took  the  cattle  home  with  an  agreement  that  fre, 
might  return  them  "if  he  did  not  find  things  as  Smith  had 
told  him."  In  the  course  of  the  evening  he  was  informed  that 
the  cattle  belonged  to  the  plaintiffs,  and  befog  unwilUngJoJbuy 
oxen  of  them,  he  rgfirnftd  t-hpr"  in  R^h  t,hp  Bfi&t  morning 
before  any  bill  of  salp-  had  heeri  ™ade-  The  jury  would  be 
authorized  to  find  that  he  returned  them  within  the  terms  of 
the  condition  upon  which  he  took  them,  because  he  did  not 
find  things  as  Smith  had  told  him.  It  is  thus  apparent  that 
upon  the  whole  evidence  they  would  be  justified  in  finding  a 
verdict  for  the  defendant. 

Exceptions  sustained. 


§133.]  HUMBLE  v.  HUNTER. 

12  Queen's  Bench  Reports,  310.  — 1848. 

Assumpsit  on  a  charter-party.  Judgment  for  plaintiff. 
The  court  granted  a  rule  nisi,  upon  a  motion  for  a  new 
trial. 

The  charter-party  was  not  signed  by  plaintiff,  but  by  her 
son,  C.  J.  Humble,  and  contained  this  clause :  u  It  is  .  .  . 
mutually  agreed  between  C.  J.  Humble,  Esq.,  owner  of  the 
good  ship  or  vessel  called  '  The  Ann,'  .  .  .  and  Jameson 
Hunter,"  etc.  C.  J.  Humble  was  offered  as  a  witness  to 
prove  that  plaintiff  was  the  true  owner  of  the  vessel,  and 
that  he  had  signed  as  her  agent.  This  was  objected  to  on 
the  ground  that  one  who  has  expressly  signed  as  principal 
cannot  testify,  in  contradiction  to  the  written  .instrument, 
that  he  signed  as  agent.  The  evidence  was  received,  and 
this  was  alleged  as  error. 

Loud  Denman,  C.  J.  We  were  rather  inclined  to  think 
at  first  that  this  case  came  within  the  doctnnje_that  a  prin- 
cipal  may  come  in  and  take  the  benefit  Q&4UQQntoaqfc  mfl(ie 
by  his  agent.     But  that  doctrine  cannot  be  applied  where  the 


§  133.]  HUMBLE   V.   HUNTER.  263 

agent  contracts  as  principal ;  and  he  has  done  so  here  by 
describing  himself  as  "owner"  of  the  ship.  The  language 
of  Lord  Ellenborough  in  Lucas  v.  Be  la  Cour,  1  M.  &  S. 
249,  "  If  one  partner  makes  a  contract  in  his  individual 
capacity,  and  the  other  partners  are  willing  to  take  the  ben- 
efit of  it,  the}'  must  be  content  to  do  so  according  to  the 
mode  in  which  the  contract  was  made,"  is  very  apposite  to 
the  present  case. 

Patteson,  J.  The  question  in  this  case  turns  on  the 
form  of  the  contract.  If  the  contract  had  been  made  in  the 
son's  name  merely,  without  more,  it  might  have  been  shown 
that  he  was  the  agent  only,  and  that  the  plaintiff  was  the 
principal.  But,  as  the  document  itself  represents  that  the  son 
contracted  as  "owner,"  Lucas  v.  De  la  Cour  applies.  There 
the  partner  who  made  the  contract  represented  that  the  prop- 
erty which  was  the  subject  of  it  belonged  to  him  alone.  The 
plaintiff  here  must  be  taken  to  have  allowed  her  son  to 
contract  in  this  form,  and  must  be  bound  by  his  act.  In 
Robson  v.  Drummond,  2  B.  &  Ad.  303,  where  Sharpe,  a 
coach-maker,  with  whom  Robson  was  a  dormant  partner, 
had  agreed  to  furnish  the  defendant  with  a  carriage  for  five 
years  at  a  certain  yearly  sum,  and  had  retired  from  the  busi- 
ness, and  assigned  all  his  interest  in  it  to  C.  before  the  end 
of  the  first  three  years,  it  was  held  that  an  action  could  not 
be  maintained  by  the  two  partners  against  the  defendant, 
who  returned  the  carriage,  and  refused  to  make  the  last 
two  yearh-  payments.  In  this  case  I  was  at  first  in  the 
plaintiff's  favor,  on  account  of  the  general  principle  referred 
to  by  m}'  Lord  ;  but  the  form  of  the  contract  takes  the  case 
out  of  that  principle. 

Wightman,  J.  I  thought  at  the  trial  that  this  case  was 
governed  by  Skinner  v.  Stocks,  4  B.  &  Aid.  437.  But 
neither  in  that  nor  in  an}-  case  of  the  kind  did  the  contracting 
party  give  himself  any  special  description,  or  make  any 
assertion  of  title  to  the  subject-matter  of  the  contract. 
Here  the  plaintiff  describes  himself  expressly  as  "  owner  "  of 
the   subject-matter.      This  brings  the  case  within  the  prin- 


264     CONTRACT  FOR  UNDISCLOSED  PRINCIPAL.      [CH.  X- 

ciple  of  Lucas  v.  JDe  la  Cour,  and  the  American  authorities 
cited. 

Lord  Denman,  C.  J.  Robson  v.  Drummond,  2  B.  &  Ad. 
303,  which  my  Brother  Patteson  has  cited,  seems  the  same, 
in  principle,  with  the  present  case.  You  have  a  right  to  the 
benefit  you  contemplate  from  the  character,  credit,  and  sub- 
stance of  the  party  with  whom  you  contract. 

Coleridge,  J.,  having  heard  the  argument  for  the  de- 
fendant only,  gave  no  judgment. 

Rule  absolute. 


CHAPTER  XI. 

ADMISSIONS  AND  DECLARATIONS  OF  AGENT. 

§  139.]  WHITE  v.  MILLER. 

71  New  York,  118.  — 1877. 

Action  against  defendants  as  "trustees  of  the  mutual 
society  called  Shakers"  to  recover  damages  for  a  breach  of 
a  contract  of  warranty  of  cabbage  seed.  Judgment  for 
plaintiffs. 

Plaintiffs  bought  the  seed  as  "large  Bristol  cabbage 
seed."  In  fact  the  seed  were  impure  and  mixed,  and  did 
not  answer  the  description. 

Andrews,  J.  (after  deciding  that  there  was  a  warranty 
arising  from  the  sale  by  description).  The  remaining  ques- 
tions arise  upon  exceptions  taken  by  the  defendants  to  the 
admission  or  rejection  of  evidence,  and  without  passing  upon 
the  validity  of  the  other  exceptions  of  this  character,  we  are 
of  opinion  that  the  referee  erred  in  allowing  the  conversation 
between  Chauncey  Miller  and  the  plaintiff  White,  at  the 
interview  between  them  in  the  fall  of  1868,  to  be  given  in 
evidence.  This  conversation  occurred  nearly  eight  months 
after  the  sale  of  the  seed,  and  the  making  of  the  warranty 
upon  which  the  action  is  brought.  If  the  declarations  of 
Miller  on  this  occasion  were  admissible  to  bind  the  society, 
they  furnished  very  material  evidence  to  sustain  the  plain- 
tiffs' case.  The  plaintiffs  sought  to  establish,  among  other 
things,  that  the  defect  in  the  seed  was  owing  to  improper 
and  negligent  cultivation,  thereby  raising  an  implied  war- 
rantjr,  in  addition  to  the  warranty  arising  out  of  the  descrip- 
tion in  the  bill  of  parcels ;  and  it  was  also  an  essential  part 
of  their  case  to  establish  that  the  seed  sold  were  not  Bristol 
cabbage  seed ;  and  this  they  sought  to  show  by  proving  by 


266  ADMISSIONS   OF  AGENT.  [CH.  XI. 

gardeners  and  other  persons  who  had  purchased  seed  of  the 
defendants  of  the  same  kind  as  that  sold  to  the  plaintiffs, 
that  their  crops  had  also  failed,  and  that  the  seed  did  not 
produce  Bristol  cahbage.  The  admissions  of  Miller,  in  the 
conversation  proved,  tended  to  establish  both  of  the  facts  re- 
ferred to,  viz.  :  that  the  seed  was  inferior  and  mixed,  owing 
to  improper  cultivation,  and  that  it  would  not  produce  Bristol 
cabbage.  He  stated,  in  the  conversation,  that  the  impurity 
of  the  seed  was  owing  to  planting  the  Bristol  cabbage  stocks 
in  the  vicinity  of  stocks  of  the  red  cabbage,  and  that  the 
society  had,  in  consequence  of  the  defective  character  of  the 
seed,  lost  their  own  crops  of  cabbage  in  that  year.  The  proof 
of  this  conversation  was  objected  to  on  several  grounds  ;  and 
among  others,  that  the  declarations  of  Miller,  when  not  en- 
gaged in  the  business  of  the  society,  were  not  admissible. 

The  general  rnlp.  is,  that  what,  one  person  says,  put  of  court. 
is  not  admissible  to  charge  or  bind  another.  The  exception 
is  in  cases  "f  igfflMg ;  and  in  cases  of  agency,  the  declara- 
tions of  the  agent  are  not  competent  to  eJMBgB  thft  principal, 
upon  proofjnerely  that  the  relation  of  principal  and  agent 
existed  when  the  declarations  were  made.  It  must  further 
irjpear  thatjhe  agent,  at  the  time  the  declaration  was  made, 
ras  jmgaged  in  executing  the  authority  conferred  upon  him, 
md  that  thedeclarations  related  to,  and  were  connected  with, 
^the  business Jben_dependingT  so  that  they  constituted  a  part 
)f  the  re,s  gest<g+  In  Fairlie  v.  Hastings  (10  Ves.  Jr.  123),  Sir 
William  Grant  expressed,  with  great  clearness  and  accuracy, 
the  doctrine  upon  this  subject.  He  said:  "  What  an  agent 
has  said  may  be  what  constitutes,  jfafl  gfrrppment  nf  thp  pr'n- 
cipajj  or  the  representations  or  statements  made  may  be  the 
foundation  of  or  the  inducement  to  thp.  agreement.  There- 
fore, if  a  writing  is  not  necessary  by  law,  the  evidence  must 
be  admitted,  to  prove  the_agent  did  make  that  statement  or 
representation.  So,  with  regard  to  acts  done,  the  wordsjwiih 
which  these  acts  are  accompanied  frequently  t,e,nd  to  dfltoft 
mine  their  quality.  The  party,  therefore,  to  be  bound  by  the 
act  must  be  affected  by  the  words.     But,  except  in  one  or 


§  139.]  WHITE  V.   MILLER.  267 

the  other  of  these  ways,  I  do  not  know  how  what  is  said  fay 
an  agent  can  be  evidence  against  the  principal.  The  mere 
assertion  of_a  fast,  cannot  -amount  to  proof  of  it,  though  it 
may_have  some  relation  to  the  business  in  which  the  person 
making  that  asjertiojtL_was_em ployed  as  agent."  See  also 
Story  on  Agency,  §§  134,  137;  Thallhimer  v.  Brinckerhoof, 
4  Wend.  394  ;  Hubbard  v.  Elmer,  7  Id.  446  ;  Luby  v.  H.  B. 
B.  B.  Co.,  17  N.  Y.  131.  The  rule  that  the  declarations  of 
the  agent  are  inadmissible  to  bind  the  principal,  unless  they 
constitute  the  agreement  which  he  is  authorized  to  make,  or 
relate  to  and  accompany  an  act  done  in  the  course  of  the 
agency,  is  applicable  in  all  cases,  whether  the  agent  is  a 
general  or  special  one,  or  the  principal  is  a  corporation  or 
private  person.  Angell  &  Ames  on  Cor.  §  309 ;  1  Gr.  Ev., 
§114  a. 

The  conversation  with  Miller  was  inadmissible  within  the 
rule  stated.  It  was  not  a  part  of  any  contract  between  the 
society  andjthe  plaintiffs,  nor  was  it  connected  with  any 
business  which  Miller  was  at  the  time  transacting  for  the 
defendants.  The  plaintiffs  had  not  then,  so  far  as  it  ap- 
pears, made  any  claim  that  the  defendants  were  liable  on  the 
warranty,  or  that  the  failure  of  the  crop  was  owing  to  a 
defect  in  the  seed.  The  plaintiff  White  states  that  up  to  the 
time  of  the  conversation,  he  had  not  been  able  to  account  for 
the  failure.  He  had  written  to  Miller  before  the  conversa- 
tion, and  requested  him  to  look  at  the  crop,  and  to  explain, 
if  he  could,  the  cause  of  the  failure ;  and,  not  receiving  an 
answer,  he  went  to  see  Miller,  when  the  conversation  referred 
to  occurred.  Miller  at  this  time  made  no  contract  or  arrange- 
ment with  White  for  a  settlement  or  adjustment  of  an}-  liabil- 
ity incurred  by  the  society,  and  he  had  no  authority  to  bind 
the  society,  if  he  had  attempted  to  do  so,  to  pay  the  large 
damages  subsequently  claimed  by  the  plaintiffs.  The  cove- 
nant expressly  declares  that  no  important  contract  made  hy 
the  trustees  shall  be  considered  valid  without  the  previous 
approbation  of  the  ministry  and  elders.  An  agreement  to 
pay  several  thousand  dollars  damages  on  a  sale  of  thirty-six 


268  ADMISSIONS  OF  AGENT.  [CH.  XI. 

dollars'  worth  of  seed,  would  be  an    important    contract, 
beyond  the  power  of  the  trustees  alone  to  make. 

For  these  reasons,  we  are  of  opinion  that  the  referee  erred 

jr|  tl10  oHmiocirm  nf  tho  nnnvareoHrm  in  qnpgtjnn. 

The_gvjdepne  was  important,  and  we  cannot  say  that  it  did 
not  influence  the  results,  For  the  error  in  admitting  it,  the 
judgment  should  be  reversed  and  a  new  trial  granted. 

Judgment  reversed. 


§  139.]    WILLIAMSON  v.  CAMBRIDGE  RAILROAD 
COMPANY. 

144  Massachusetts,  148.  — 1887. 

Tort  for  personal  injuries.  Judgment  for  defendant. 
Plaintiff  alleges  exceptions. 

Plaintiff  was  thrown  from  defendant's  horse-car  while 
attempting  to  alight.  She  was  unconscious  for  a  moment 
on  striking  the  pavement ;  the  conductor  hastened  to  her 
assistance,  and  said,  "  I  am  very  sorry,  madam,  that  was  my 
fault."     The  trial  judge  excluded  evidence  of  this  remark. 

W.  Allen,  J.  This  case  cannot  be  distinguished  from 
Lane  v.  Bryant,  9  Gray,  245.  That  was  an  action  for  injury 
to  the  plaintiff's  carriage  by  collision  with  the  defendant's 
wagon  driven  by  his  servant.  A  witness  was  asked  "  what 
the  servant  said  to  the  plaintiff  at  the  time  of  the  accident, 
and  while  the  plaintiff  was  being  extricated  from  his  carriage, 
and  while  the  crowd  was  about."  The  reply,  that  the  servant 
said  the  plaintiff  was  not  to  blame,  was  admitted,  and  an 
exception  to  its  admission  was  sustained.  Mr.  Justice  Bige- 
low,  in  delivering  the  opinion  of  the  court,  said,  in  language 
which  well  applies  to  the  case  at  bar:  "  The  declaration  of 
the  defendant's  servant  was  incompetent,  and  should  have 
been  rejected.  It  was  made  after  the  accident  occurred,  and 
the  injury  to  the  plaintiffs  carriage  had  been  done.  It  did 
not  accompany  the  principal  act.  .  .  .  or  fond  in  any  way_I^ 
elucidate  it.     It  was  only  the  expression  of  an  opinion  about 


§  139.]  ELLEDGE  V.   RAILWAY  CO.  269 

a  past  occurrence,  and  not  part  of  the  res  gestae.  It  is  no  more 
competent  because  made  immediately  after  the  accident  than 
if  made  a  week  or  a  month  afterwards." 

In  the  case  under  consideration,  the  plaintiff  relied  upon 
the  act  of  the  conductor  in  ringing  the  bell  and  starting  the 
car  while  the  plaintiff  was  leaving  it,  to  prove  negligence  in 
the  defendant.  The  words  of  the  conductor  did  not  form 
part  of  that  transaction,  or  in  any  manner  qualify  his  actt  j>r 
any  act  of  the  plaintiff,  They  were  in  form  and  substance 
narrative,  and  expressed  an  opinion  upon  a,  past  transaction. 
The  words,  if  competent  as  an  admission,  might  have  been 
evidence  to  show  what  the  character  of  the  transaction  was, 
but  they  did  not  enter  into  it  and  give  it  character,  any  more 
than  would  the  declaration  of  the  conductor  that  he  had  not 
been  in  fault,  or  that  the  plaintiff  had  been.^  In  the  opinion  of 
a  majority  of  the  court,  the  evidence  was  properly  excluded. 

Exceptions  overruled. 


§  139.]    ELLEDGE  v.  RAILWAY  COMPANY. 
100  California,  282.— 1893. 

Action  for  damages  for  personal  injuries.  Judgment  for 
plaintiff.     Defendant  appeals. 

Plaintiff  was  a  workman  engaged  in  loading  rock  from  a 
bank  or  cliff  from  ten  to  sixteen  feet  high,  under  the  direction 
of  defendant's  roadmaster.  There  was  a  seam  or  crack  behind 
the  bank,  known  to  the  roadmaster  but  unknown  to  plaintiff, 
which  rendered  the  place  unsafe  for  work.  A  portion  of  the 
rocjss  and  earth  slid  down  and  injured  plaintiff.  When  the 
roadrnaster  saw  what  had  happened,  he.  exclflirppd  :  "  My  God , 
I  expected  that !  " 

Temple,  C.  (after  disposing  of  other  matters).  Appellant 
also  alleges  some  errors  of  law  at  the  trial. 

He  contends  that  it  was  error  to  permit  the  witness  to  state, 
against  his  objection,  the  exclamation  of  O'Connell  (the  road- 


270  ADMISSIONS   OF  AGENT.  [CH.  XI. 

master),  when  the  cliff  came  down.  Xms  is  plainly  part  of 
the  res  gestae.  It  was  unpremeditated  and  could  hardly  have 
been  made  if  O'Connell  had  not  feared  that  it  might  come 
down.  It  does  not  depend  for  its  probative  force  upon  O'Con- 
nelTsveracity,  and  therein  is  entirely  unlike  a  deliberate 
admission  made  after  the  event.  .  .  . 

Judgment  affirmed. 

Yordy  v.  Marshall  County,  86  Iowa,  340  (1892):  In  an 
action  for  damages  for  the  breaking  down  of  a  county  bridge,  the 
court  admitted  evidence  that  a  member  of  the  board  of  super- 
visors, after  the  accident,  declared  that  the  bridge  had  been  con- 
demned by  the  board  as  unsafe,  and  notices  to  that  effect  ordered 
posted.  Held :  "  It  appears  that  the  alleged  declarations  of  Bene- 
dict were  made  after  the  accident,  and  it  does  not  appear  that 
when  he  made  the  declarations  he  was  engaged  in  any  official  work 
or  employment  for  the  county.  Under  these  circumstances,  the 
testimony  as  to  his  declarations  was  not  competent  evidence.  He 
was  an  agent  of  the  county,  and  his  declaration  was  in  no  way 
connected  with,  nor  a  part  of,  the  res  gestce." 

Vicksburg,  &c.  R.  v.  O'Brien,  119  U.  S.  99  (1886)  :  An  en- 
gineer ten  to  thirty  minutes  after  an  accident  declared  that  at  the 
time  of  the  accident  the  train  was  running  at  the  rate  of  eighteen 
miles  an  hour.  Held :  Incompetent.  "  The  occurrence  had  ended 
when  the  declaration  in  question  was  made,  and  the  engineer  was 
not  in  the  act  of  doing  anything  that  could  possibly  affect  it.  If 
his  declaration  had  been  made  the  next  day  after  the  accident,  it 
would  scarcely  be  claimed  that  it  was  admissible  evidence  against 
the  company.  And  yet  the  circumstance  that  it  was  made  be- 
tween ten  and  thirty  minutes  —  an  appreciable  period  of  time  — 
after  the  accident,  cannot,  upon  principle,  make  this  case  an  ex- 
ception to  the  general  rule.  If  the  contrary  view  shall  be  main- 
tained, it  would  follow  that  the  declarations  of  the  engineer,  if 
favorable  to  the  company,  would  be  admissible  in  its  behalf  as  part 
of  the  res  gestce,  without  calling  him  as  a  witness  —  a  proposition 
that  will  find  no  support  in  the  law  of  evidence.  The  cases  have 
gone  far  enough  in  the  admission  of  the  subsequent  declarations 
of  agents  as  evidence  against  their  principals." 


CHAPTER  XII. 

NOTICE  TO  THE  AGENT.       V  %<*^Ma<~>\  .-  Cpw 

§  144.]  THE  DISTILLED   SPIRITS. 

11  Wallace  (U.  S.),  356.  — 1870. 

Information  filed  by  the  United  States  upon  the  seizure  of 
278  barrels  of  distilled  spirits  for  violation  of  the  revenue 
laws.  Appearance  and  claim  of  ownership  by  one  Harring- 
ton and  one  Boyden.  Decree  against  50  barrels  claimed  by 
Harrington  and  all  those  claimed  by  Boyden.  Appeal  by 
claimants. 

The  spirits  were  withdrawn  from  bond  by  false  and  fraudu- 
lent representations,  and  upon  false  and  fraudulent  bonds. 
Defendants  claimed  to  have  purchased  in  open  market  with- 
out notice  of  this  fraud,  Harrington  having  purchased  through 
Boyden  as  his  agent.  The  court  charged  that  if  Boyden 
was  cognizant  of  the  fraud,  Harrington  would  be  bound  by 
Boyden's  knowledge. 

Mr.  Justice  Bradley.  .  .  .  The  substance  of  the  third 
instruction  prayed  for  was,  that  if  the  spirits  were  removed 
from  the  warehouse  according  to  the  forms  of  law,  and  the 
claimants  bought  them  without  knowledge  of  the  fraud,  they 
were  not  liable  to  forfeiture.  The  court  charged  in  accord- 
ance with  this  prayer  with  this  qualification,  that  if  Boyden 
bought  the  spirits  as  agent  for  Harrington,  and  was  cognizant 
of  the  fraud,  Harrington  would  be  bound  by  his  knowledge. 
The  claimants  insist  that  this  is  not  law. 

The  question  how  far  a  purchaser  is  affected  with  notice  of 
prior  liens,  trusts,  or  frauds,  by  the  knowledge  of  his  agent 
who  effects  the  purchase,  is  one  that  has  been  much  mooted 
in  England  and  this  country.     That  he  is  bound  and  affected 


272  NOTICE  TO  AGENT.  [CH.  XII. 

by  such  knowledge  or  notice  as  his  agent  obtains  in  nego- 
tiating the  particular  transaction,  is  everywhere  conceded. 
But  Lord  Hardwicke  thought  that  the  rule  could  not  be 
extended  so  far  as  to  affect  the  principal  by  knowledge  of 
the  agent  acquired  previously  in  a  different  transaction. 
Warrick  v.  Warrick,  3  Atkyns,  291.  Supposing  it  to  be 
clear,  that  the  agent  still  retained  the  knowledge  so  formerly 
acquired,  it  was  certainly  making  a  very  nice  and  thin  dis- 
tinction. Lord  Eldon  did  not  approve  of  it.  In  Mountford 
v.  Scott,  1  Turner  &  Russel,  274,  he  says :  "  It  may  fall  to 
be  considered  whether  one  transaction  might  not  follow  so 
close  upon  the  other  as  to  render  it  impossible  to  give  a  man 
credit  for  having  forgotten  it.  I  should  be  unwilling  to  go 
so  far  as  to  say,  that  if  an  attorney  has  notice  of  a  transac- 
tion in  the  morning,  he  shall  be  held  in  a  court  of  equity  to 
have  forgotten  it  in  the  evening ;  it  must  in  all  cases  depend 
upon  the  circumstances."  The  distinction  taken  by  Lord 
Hardwicke  has  since  been  entirely  overruled  by  the  Court 
of  Exchequer  Chamber  in  the  case  of  Dresser  v.  Norwood, 
1 7  Common  Bench,  N.  S.  466.  So  that  in  England  the  doctrine 
now  seems  to  be  established,  that  if  the  agent  at  the  time  of 
effecting  a  purchase,  has  knowledge  of  any  prior  lien,,  trust, 
or  fraud,  affecting  the  property,  no  matter  when  _he^  acquired 
such  knowledge,  his  principal  is  affected  thereby.  If  he  ac- 
quire the  knowledge  when  he  effects  the  purchase,  no  question 
can  arise  as  to  his  having  it  at  that  time ;  if  he  acquired  it 
previous  to  the  purchase,  the  presumption  that  he  still  retains 
it,  and  has  it  present  to  his  mind,  will  depend  on  the  lapse  of 
time  and  other  circumstances.  Knowledge  communicated  to 
the  principal  himself  he  is  bound  to  recollect,  but  he  is  not 
bound  by  knowledge  communicated  to  his  agent,  unless  it  is 
present_to  the  agent's  mind  at.  the  f'mft  of  effecting  the  pur- 
chase. Clear  and  satisfactory  proof  that  it  was  so  present 
seems  to  be  the  only  restriction  required  b}^  the  English  rule 
as  now  understood.  With  the  qualification  that  the  agent  is 
at  liberty  to  communicate  his  knowledge  to  his  principal,  it 
appears  to  us  to  be  a  sound  view  of  the  subject    The  general 


§  144.]  THE  DISTILLED   SPLH1TS.  273 

rule  that  a  principal  is  bound  by  the  knowledge  of  his  agent 
is  based  on  the  principle  of  law,  that  it  is  the  agent's  duty 
to  communicate  to  his  principal  the  knowledge  which  he  has 
respecting  the  subject-matter  of  negotiation,  and  the  presump- 
tion that  he  will  perform  that  duty.  When  it  is  not  the 
agent's  duty  to  communicate  such  knowledge,  when  it  would 
be  unlawful  for  him  to  do  so,  as,  for  example,  when  it  has 
been  acquired  confidentially  as  attorney  for  a  former  client 
in  a  prior  transaction,  the  reason  of  the  rule  ceases,  and  in 
such  a  case  an  agent  would  not  be  expected  to  do  that  which 
would  involve  the  betrayal  of  professional  confidence,  and 
his  principal  ought  not  to  be  bound  by  his  agent's  secret  and 
confidential  information.  This  often  happened  in  the  case 
of  large  estates  in  England,  where  men  of  great  professional 
eminence  were  frequently  consulted.  They  thus  became  pos- 
sessed, in  a  confidential  manner,  of  secret  trusts,  or  other 
defects  of  title,  which  they  could  not  honorably,  if  they  could 
legally,  communicate  to  subsequent  clients.  This  difficulty 
presented  itself  to  Lord  Hardwicke's  mind,  and  undoubtedly 
lay  at  the  bottom  of  the  distinction  which  he  established. 
Had  he  confined  it  to  such  cases,  it  would  have  been  entirely 
unexceptionable. 

The  general  tendency  of  decisions  in  this  country  has  been 
to  adopt  the  distinction  of  Lord  Hardwicke,  but  it  has  several 
times  been  held,  in  consonance  with  Lord  Eldon's  suggestion, 
that  if  the  agent  acquired  his  information  so  recently  as  to 
make  it  incredible  that  he  should  have  forgotten  it,  his  prin- 
cipal will  be  bound.  This  is  really  an  abandonment  of  the 
principle  on  which  the  distinction  is  founded,  Story  on 
Agency,  §  140 ;  Hovey  v.  Blanchard,  13  N.  H.  145  ;  Patten 
v.  Insurance  Co.,  40  Id.  375  ;  Hart  v.  Farmers'  &  Mechanics' 
Bank,  33  Vt.  252.  The  case  of  Mart  v.  Farmers'  &  Mechanics' 
Bank,  33  Vt.  252,  adopts  the  rule  established  by  the  case  of 
Dresser  v.  Norwood.  Other  cases,  as  that  of  Bank  of  United 
States  v.  Davis,  2  Hill,  452 ;  New  York  Central  Insurance 
Co.  v.  National  Protection  Co.,  20  Barb.  468,  adhere  to  the 
more  rigid  views.     See  cases  collected  in  note  to  American 

18 


274  NOTICE  TO  AGENT.  [CH.  XIL 

edition  of  17  Common  Bench,  N.  S.  482,  and  Mr.  Justice 
Clifford's  opinion  in  the  Circuit  Court  in  the  present  case. 

On  tbe  whole,  however,  we  think  that  the  rule  as  finally 
settled  by  the  English  courts,  with  the  qualification  above 
mentioned,  is  the  true  one,  and  is  deduced  from  the  best 
consideration  of  the  reasons  on  which  it  is  founded.     Apply- 
ing it  to  the  case  in  hand,  we  think  that  the  charge  was  sub- 
stantially correct.     The  fair  construction  of  the  charge  is, 
that  if  the  jury  believed  that  Boyden,  the  agent,  was  cogni- 
zant of  the  fraud  at  the  time  of  the  purchase,  Harrington,  the 
principal,  was  bound  by  this  knowledge.     The  precise  words 
were,  "that  if  Boyden  bought  the  spirits  as  agent  for  Har- 
rington, and  Boyden  was  cognizant  of  the  fraud,  Harrington 
would  be  bound  by  his  knowledge."     The  plain  and  natural 
sense  of  these  words,  and  that  in  which  the  jury  would  under- 
stand them,  we  think,  is  that  they  refer  to  Boyden's  knowl- 
edge at  the  time  of  making  the  purchase.     Thus  construed, 
the  charge  is  strictly  in  accordance  with  the  law  as  above 
explained.    There  was  no  pretence  that  Boyden  acquired  his 
knowledge  in  a  fiduciary  character. 

•  •••••. 

Judgment  affirmed. 


§  144.]  CONSTANT  v.  UNIVERSITY  OF  ROCHESTER. 

Ill  New  York,  604.  — 1889. 

Aciion  to  foreclose  a  mortgage  dated  February  17,  1883, 
given  by  A.  &  B.  to  plaintiff's  testator.  Defendant  sets  up 
title  under  foreclosure  proceedings  upon  a  mortgage  dated 
January  10,  1884,  given  by  A.  &  B.  to  defendant.  At  the 
time  defendant  purchased  under  the  foreclosure  sale  plain- 
tiffs mortgage  had  not  been  recorded,  and  defendant  denies 
any  notice  or  knowledge  of  it.  One  Deane  acted  as  attorney 
and  agent  of  plaintiff  in  taking  the  first  mortgage,  and  of 
defendant  in  taking  the  second.  Judgment  for  plaintiff. 
Defendant  appeals. 


§  144.]     CONSTANT  V.  UNIVERSITY  OF  ROCHESTER.      275 

Peckham,  J.  (after  discussing  the  evidence  and  the 
authorities  upon  the  subject  of  notice).  But  the  burden  is 
upon  the  plaintiff  to  prove,  clearly  and  beyond  question,  that 
he  [the  agent]  did,  and  it  is  not  upon  the  defendant  to  show 
that  he  did  not  have  such  recollection.  And  we  think  that 
there  is  a  total  lack  of  evidence  in  the  case  which  would 
sustain  the  finding  that  Deane  has  the  least  recollection  on 
the  subject  at  the  time  of  the  execution  of  the  university 
mortgage.  Under  such  circumstances  we  think  it  impossible 
to  impute  notice  to  the  university,  or  knowledge  in  regard  to 
a  fact  which  is  not  proved  to  have  been  possessed  by  its 
agent.  If  such  knowledge  did  not  exist  in  Deane  at  the  time 
of  his  taking  the  mortgage  to  the  university,  then  the  latter 
is  a  bona  fide  mortgagee  for  value,  and  its  mortgage  should 
be  regarded  as  a  prior  lien  to  that  of  the  unrecorded  mort- 
gage of  Constant,  which  is  prior  in  point  of  date.  The  plain- 
tiff is  bound  to  show,  by  clear  and  satisfactor}'  evidence,  that 
when  this  mortgage  to  the  university  was  taken  by  Deane, 
he  then  had  knowledge,  and  the  fact  was  then  present  in  his 
mind,  not  only  that  he  had  taken  a  mortgage  to  Constant 
eleven  months  prior  thereto  on  the  same  premises,  which  had 
not  been  recorded,  but  that  such  mortgage  was  an  existing 
and  valid  lien  upon  the  premises,  which  had  not  been  in  anjT 
manner  satisfied.  If  he  recollected  that  there  had  been  such 
a  mortgage,  but  honestly  believed  that  it  was  or  had  been 
satisfied,  then,  although  mistaken  upon  that  point,  the 
university  could  not  be  charged  with  knowledge  of  the 
existence  of  such  mortgage.  .  .  . 

One  other  question  has  been  argued  before  us  which  has 
been  the  subject  of  a  good  deal  of  thought.  It  is  this : 
Assuming  that  Deane  had  knowledge  of  the  existence  of 
the  Constant  mortgage  at  the  time  of  the  execution  of  the 
mortgage  to  the  university,  is  his  knowledge  to  be  imputed 
to  the  university,  considering  the  position  Deane  occupied  to 
both  mortgagees? 

While  acting  as  the  agent  of  Constant  in  taking  the 
mortgage  in  question  as  security  for  the  funds  which  he 


276  NOTICE  TO   AGENT.  [CH.  XII. 

was  investing  for  him,  it  was  the  duty  of  Deane  to  see  that 
the  moneys  were  safely  and  securely  invested.  The  value 
of  the  property  was  between  eleven  and  twelve  thousand 
dollars  ;  and  it  was  obviously  the  duty  of  Deane  to  see  that 
the  mortgage  which  he  took  upon  such  property  as  a  security 
for  a  loan  of  $6,000  for  Constant  should  be  a  first  lien  thereon. 
Whitney  v.  Martine,  88  N.  Y.  535.  In  order  to  become  such 
first  lien  it  was  the  duty  of  Deane  to  see  that  the  Constant 
mortgage  was  first  recorded.  In  January,  1884,  when  acting 
as  agent  for  the  university  to  invest  its  moneys,  he  owed  the 
same  duty  to  the  university  that  he  did  to  Constant,  and  it 
was  his  business  to  see  that  the  security  which  he  took  was 
a  safe  and  secure  one.  Neither  mortgage  was  safe  or  secure 
if  it  were  a  subsequent  lien  to  the  other  upon  this  property. 
This  duty  he  continued  to  owe  to  Constant  at  the  time  he 
took  the  mortgage  to  the  university. 

At  the  time  of  the  execution  of  the  latter  mortgage,  there- 
fore, he  owed  conflicting  duties  to  Constant  and  to  the  uni- 
versity, the  duty  in  each  case  being  to  make  the  mortgage 
to  each  principal  a  first  lien  on  the  property.  Owing  these 
conflicting  duties  to  two  different  principals,  in  two  separate 
transactions,  can  it  be  properly  said  that  any  knowledge 
coming  to  him  in  the  course  of  either  transaction  should  be 
imputed  to  his  principal?  Can  any  agent  occupying  such  a 
position  bind  either  principal  by  constructive  notice  ?  It  has 
been  stated  that  in  such  a  case  where  an  agent  thus  owes 
conflicting  duties,  the  security  which  is  taken  or  the  act 
which  is  performed  b}'  the  agent  may  be  repudiated  by  his 
principal  when  he  becomes  aware  of  the  position  occupied 
by  such  agent.     Storj'  on  Agenc}',  §  210. 

The  reason  for  this  rule  is,  that  the  principal  has  the  right 
to  the  best  efforts  of  his  agent  in  the  transaction  of  the 
business  connected  with  his  agency,  and  where  the  agent 
owes  conflicting  duties  he  cannot  give  that  which  the  prin- 
cipal has  the  right  to  demand,  and  which  he  has  impliedly 
contracted  to  give.  Ought  the  university  to  be  charged  with 
notice  of  the  existence  of  this  prior  mortgage  when  it  was 


§  144.]     CONSTANT  V.  UNIVERSITY  OF  ROCHESTER.      277 

the  duty  of  its  agent  to  procure  for  it  a  first  lien,  while,  at 
the  same  time,  in  his  capacity  as  agent  for  Constant,  it  was 
equally  his  duty  to  give  to  him  the  prior  lien  ?  Which  prin- 
cipal should  he  serve  ?  There  have  been  cases  where,  in  the 
sale  and  purchase  of  the  same  real  estate,  both  parties  have 
employed  the  same  agent,  and  it  has  been  held  under  such 
circumstances  that  the  knowledge  of  the  agent  was  to  be  im- 
puted to  both  of  his  principals.  If,  with  a  full  knowledge  of 
the  facts  that  his  own  agent  was  the  agent  of  the  other,  each 
principal  retained  him  in  his  employment,  we  can  see  that 
there  would  be  propriety  in  so  holding ;  for  each  then  notes 
the  position  which  the  agent  has  with  regard  to  the  other, 
and  each  takes  the  risk  of  having  imputed  to  him  whatever 
knowledge  the  agent  may  have  on  the  subject.  See  Le  Neve 
v.  Le  Neve,  1  Ambler's  Reports,  436,  Hardwicke,  Chancellor, 
decided  in  1747  ;  Toulmin  v.  Steere,  3  Merivale,  209,  decided 
in  1817,  by  Sir  Walter  Grant,  Master  of  the  Rolls.  The 
case  of  Nixon  v.  Hamilton,  already  referred  to,  decided  by 
Lord  Plunkett,  Lord  Chancellor  in  the  Irish  Court  of  Chan- 
cery^ in  1838  (2  Drury  &  Walsh,  364),  is  a  case  in  many 
respects  somewhat  like  the  one  at  bar,  so  far  as  this  prin- 
ciple is  concerned,  if  it  be  assumed  that  Deane  really  had 
the  knowledge  of  the  prior  mortgage  as  an  existing  lien. 
It  will  be  observed,  however,  upon  examination  of  it,  that 
the  question,  whether  the  knowledge  of  the  common  agent  in 
two  different  transactions  with  two  different  principals  was 
notice  to  the  second  principal,  was  not  raised  with  reference 
to  this  particular  ground.  The  whole  discussion  was  upon 
the  subject  of  imputing  the  knowledge  of  the  agent  to  the 
second  mortgagee,  of  the  existence  of  the  prior  mortgage, 
which  knowledge  was  not  obtained  in  the  last  transaction. 
Whether  such  knowledge  should  or  should  not  be  imputed  to 
the  second  mortgagee,  because  of  the  conflicting  duties  owed 
by  the  common  agent,  was  not  raised.  The  only  defence  set 
up  was,  that  the  information  did  not  come  to  the  agent  of 
the  second  mortgagee  in  the  course  of  transacting  the  busi- 
ness of  the  second  mortgagee,  and  the  question  was  simply 


278  NOTICE  TO  AGENT.  [CH.  XII. 

whether  such  knowledge  could  be  imputed  to  the  second 
mortgagee,  because  of  the  knowledge  acquired  by  his  agent 
at  another  time,  in  another  transaction,  with  another  prin- 
cipal. The  court  held,  that  where  it  appeared,  as  in  this 
case  it  did  appear,  fully  and  plainly,  that  the  matter  was 
fresh  in  the  recollection,  and  fully  within  the  knowledge  of 
the  agent,  and  under  such  circumstances,  that  it  was  a  gross 
fraud  on  the  part  of  the  agent,  in  the  first  place  in  keeping  a 
prior  mortgage  off  the  record,  and  in  the  second  place,  in  not 
communicating  the  knowledge  which  he  had  to  his  principal, 
the  second  mortgagee,  that  in  such  case  the  second  mort- 
gagee was  charged  with  the  knowledge  of  his  agent. 

Whether  the  same  result  would  have  been  reached  if  the  other 
ground  had  been  argued  we  cannot  of  course  assume  to  decide. 
I  have  found  no  case  precisely  in  point  where  the  subject  has 
been  discussed  and  decided  either  way.  I  have  very  grave 
doubts  as  to  the  propriety  of  holding  in  the  case  of  an  agent, 
situated  as  I  have  stated,  that  his  principal  in  the  second 
mortgage  should  be  charged  with  knowledge  which  such 
agent  acquired  in  another  transaction,  at  a  different  time, 
while  in  the  employment  of  a  different  principal,  and  where 
his  duties  to  such  principal  still  existed  and  conflicted  with 
his  duty  to  his  second  principal.  "We  do  not  deem  it,  how- 
ever, necessary  to  decide  the  question  in  this  case. 

For  the  reasons  already  given  the  judgment  should  be 
reversed  and  a  new  trial  ordered,  with  costs  to  abide  the 
event. 

Gray  and  Andrews,  JJ.,  dissent. 

Judgment  reversed. 


§  144.]        MCCORMICK  V.   JOSEPH.  279 

§  144.]  Mccormick  v.  joseph. 

83  Alabama,  401.  —  1887. 

Action  to  recover  possession  of  goods.  Intervention  by 
claimants.     Judgment  for  plaintiffs.     Claimants  appeal. 

Plaintiffs  sold  the  goods  to  one  Manasses.  Manasses  turned 
over  a  part  of  the  goods  to  claimants  in  payment  of  a  debt. 
Plaintiffs  claim  the  right  to  rescind  the  contract  of  sale  on  the 
ground  that  Manasses  fraudulently  obtained  the  goods  while 
insolvent  and  having  no  expectation  of  paying  for  them,  and 
that  claimants  had  notice  of  Manasses'  insolvency.  The 
evidence  to  sustain  the  contention  that  claimants  had  notice 
was  this :  One  White,  who  was  claimants'  attorney  in  securing 
the  goods  in  payment  of  the  debt,  had  a  few  days  earlier 
drawn  a  mortgage  upon  Manasses'  stock  of  merchandise  in 
favor  of  E.,  and  had  aided  in  a  transfer  of  the  rest  of  the  stock 
to  Manasses'  wife  ;  White  testified  that  while  performing  these 
services  he  ascertained  that  Manasses  was  insolvent.  The 
court  charged  in  substance  that  claimants  were  chargeable  in 
law  with  notice  of  the  facts  ascertained  by  White  in  the  course 
of  the  previous  transactions  between  Manasses  and  E.  and 
Manasses  and  wife. 

Stone,  C.  J.  It  was  early  settled  in  this  State,  and  has 
been  since  followed,  that  notice,  or  knowledge  by  an  attorney, 
to  carry  home  constructive  notice  to  the  client,  must  be  shown 
to  have  been  given  or  acquired  after  the  relation  of  attorney 
and  client  was  formed.  It  is  not  enough  that  the  notice  is  first, 
and  the  retainer  afterwards.  Lucas  v.  Bank  of  Darien,  2 
Stew.  280 ;  Terrell  v.  Br.  Bank,  12  Ala.  502 ;  Freukel  v. 
Hudson,  82  Ala.  158 ;  Story  on  Agency,  §  140.  The  case 
of  City  Nat.  Bank  v.  Jeffries,  73  Ala.  183,  is  not  opposed  to 
this  view.  In  that  case,  the  information  was  obtained  while 
the  relation  of  attorney  and  client  existed. 

This  must  work  a  reversal  of  this  case. 


280  NOTICE  TO   AGENT.  [CH.  XII. 

§  145.]  HEGENMYER  v.  MARKS. 

37  Minnesota,  6.  — 1887. 
[Reported  herein  at  p.  339.] 


§  147.]     CARPENTER  v.  GERMAN  AMERICAN 
INSURANCE  CO. 

135  New  York,  298.  — 1892. 

Action  upon  a  policy  of  fire  insurance.  Judgment  for 
plaintiff. 

One  Mandeville  was  agent  of  defendant.  He  emploj'ed  a 
sub-agent,  Andrews,  to  solicit  insurance.  Andrews  inspected 
the  premises  and  knew  before  the  policy  was  issued  that  the 
plaintiff  was  not  the  absolute  owner.  Defendant  contends 
that  it  is  not  chargeable  with  such  notice  and  that  the  policy 
is  avoided  by  breach  of  the  term  by  which  plaintiff  undertakes 
that  he  is  the  "  sole,  absolute,  and  unconditional  owner." 

Andrews,  J.  It  must  be  assumed  in  disposing  of  this 
appeal  that  Andrews,  the  sub-agent  of  Mandeville,  before  the 
original  policy  was  issued  of  which  the  policy  upon  which  this 
action  is  brought  is  a  renewal,  was  sent  by  Mandeville  to 
inspect  the  premises  and  arrange  the  insurance,  and  that  he 
was  then  informed  by  the  plaintiff  that  the  property  upon 
which  the  insured  building  was  erected  was  held  under  a  con- 
tract of  purchase  from  the  State  Bank  of  Elizabeth,  New 
Jersey.  If  this  constituted  notice  to  the  defendant,  then, 
within  our  decisions,  the  policy  was  not  avoided  by  the 
printed  condition  that  if  the  insured  is  not  the  "  sole,  abso- 
lute, and  unconditional  owner  of  the  property  insured,  or  if 
said  property  be  a  building,  and  the  insured  be  not  the  owner 
of  the  land  on  which  said  building  stands,  by  title  in  fee- 
simple,  and  this  fact  is  not  expressed  in  the  written  portion 


§  147.]  CARPENTER  V.   INS.   CO.  281 

of  the  policy,  this  policy  shall  be  void."  Van  Schoick  v. 
Niagara  Fire  Ins.  Co.,  68  N.  Y.  434.  It  appears  that 
Mandeville  was  a  general  agent  of  the  defendant,  clothed 
with  power  to  make  contracts  of  insurance  and  to  issue  poli- 
cies, and  was  furnished  with  printed  forms  which  he  filled  up 
as  occasion  required.  He  was  agent  for  several  other  com- 
panies also,  which  presumably  upon  the  evidence  was  known 
to  the  defendant.  Andrews  had  been  employed  by  him  for 
several  years  before  the  policy  in  question  was  issued,  to 
solicit  insurance,  acting  as  Mandeville's  clerk  and  employe. 
It  has  been  the  common  custom  and  practice  of  agents  of 
insurance  companies,  having  the  power  of  general  agents, 
to  employ  subordinates  to  render  services  similar  to  those 
rendered  by  Andrews,  and  we  have  held  that  notice  to  such 
a  sub-agent  while  engaged  in  soliciting  insurance  of  any  fact 
material  to  the  risk,  and  which  affects  the  contract  of  insur- 
ance, is  notice  to  the  company,  and  binds  the  compan}*  to  the 
same  extent  as  though  it  had  been  given  directly  to  the  agent 
himself.  Arff  v.  Starr  Ins.  Co.,  125  N.  Y.  57 ;  Bodine  v. 
Exchange  Ins.  Co.,  51  Id.  117.  The  point,  therefore,  based 
on  the  condition  as  to  the  ownership  of  the  insured  property 
must  be  overruled. 

•  ■*•••• 

Judgment  affirmed. 


CHAPTER  XIII. 

LIABILITY  OF  PRINCIPAL  FOR  TORTS  OF  AGENT. 

1.  Liability  for  torts  generally. 

§  149.]    SINGER  MANUFACTURING  CO.  v.  RAHN. 
132  United  States,  518.  — 1889. 
[Reported  herein  at  p.  9.] 

§149.]  HUNTLEY  v.  MATHIAS. 

90  North  Carolina,  101.  — 1884. 
[Reported  herein  at  p.  203.] 

§149.]  DEMPSEY  v.   CHAMBERS. 

154  Massachusetts,  330.  —  1891. 
[Reported  herein  at  p.  94.] 

2.  Fraud  for  benefit  of  principal. 

§  153.]  BARWICK  v.  ENGLISH  JOINT  STOCK  BANK. 

Law  Reports,  2  Exchequer  (Chamber),  259.  — 1867. 

Action  in  tort  for  damages  for  fraud.  At  the  close  of 
plaintiff's  case  the  trial  court  directed  a  non-suit  on  the 
ground  that  there  was  no  evidence  proper  to  go  to  the  jury. 
Bill  of  exceptions. 


§  153.]    BABWICK  V.  ENGLISH  JOINT  STOCK  BANK.      283 

Willes,  J.  (for  the  court1).  This  case,  in  which  the 
court  took  time  to  consider  their  judgment,  arose  on  a  bill 
of  exceptions  to  the  ruling  of  my  Brother  Martin  at  the 
trial  that  there  was  no  evidence  to  go  to  the  jury. 

It  was  an  action  brought  for  an  alleged  fraud,  which  was 
described  in  the  pleadings  as  being  the  fraud  of  the  bank, 
but  which  the  plaintiff  alleged  to  have  been  committed  by 
the  manager  of  the  bank  in  the  course  of  conducting  their 
business.  At  the  trial,  two  witnesses  were  called,  first, 
Barwick,  the  plaintiff,  who  proved  that  he  had  been  in 
the  habit  of  supplying  oats  to  a  customer  of  the  bank  of 
the  name  of  Davis ;  and  that  he  had  done  so  upon  a 
guarantee  given  to  him  by  the  bank,  through  their  manager, 
the  effect  of  which  probably  was,  that  the  drafts  of  the 
plaintiff'  upon  Davis  were  to  be  paid,  subject  to  the  debt 
of  the  bank.  What  were  the  precise  terms  of  the  guarantee 
did  not  appear,  but  it  seems  that  the  plaintiff  became  dis- 
satisfied with  it,  and  refused  to  supply  more  oats  without 
getting  a  more  satisfactory  one ;  that  he  applied  to  the 
manager  of  the  bank,  and  that  after  some  conversation 
between  them,  a  guarantee  was  given,  which  was  in  this 
form :  — 

Dear  Sir,  —  Referring  to  our  conversation  of  this  morn- 
ing, I  beg  to  repeat  that  if  you  sell  to,  or  purchase  for,  J. 
Davis  and  Son  not  exceeding  1,000  quarters  of  oats  for  the 
use  of  their  contract,  I  will  honor  the  check  of  Messrs.  J. 
Davis  and  Son  in  your  favor  in  payment  of  the  same,  on  re- 
ceipt of  the  money  from  the  commissariat  in  payment  of 
forage  supplied  for  the  present  month,  in  priority  to  any 
other  payment  except  to  this  bank ;  and  provided,  as  I  ex- 
plained to  you,  that  they,  J.  Davis  and  Son,  are  able  to 
continue  their  contract,  and  are  not  made  bankrupts. 

(Signed.)        Don.  M.  Dewar,  Manager. 

The  plaintiff  stated  that  in  the  course  of  the  conversation 
as  to  the  guarantee,  the  manager  told  him  that  whatever 

1  Willes,  Blackburn-,  Keating,  Mellob,  Montague  Smith,  and 
Lush,  JJ. 


284  TORTS   BY  AGENT.  [CH.  XTTT. 

time  he  received  the  government  check,  the  plaintiff  should 
receive  the  money. 

Now,  that  being  the  state  of  things  upon  the  evidence  of 
the  plaintiff,  it  is  obvious  that  there  was  a  case  on  which 
the  jury  might  conclude,  if  they  thought  proper,  that  the 
guarantee  given  by  the  manager  was  represented  by  him 
to  be  a  guarantee  which  would  probably,  or  might  probably, 
be  paid,  and  that  the  plaintiff  took  the  guarantee,  supposing 
that  it  was  of  some  value,  and  that  the  check  would  prob- 
ably, or  might  probably,  be  paid.  But  if  the  manager  at 
the  time,  from  his  knowledge  of  the  accounts,  knew  that  it 
was  improbable  in  a  very  high  degree  that  it  would  be  paid, 
and  knew  and  intended  that  it  should  not  be  paid,  and  kept 
back  from  the  plaintiff  the  fact  which  made  the  payment  of 
it  improbable  to  the  extent  of  being  as  a  matter  of  busiuess 
impossible,  the  jury  might  well  have  thought  (and  it  was  a 
matter  within  their  province  to  decide  upon)  that  he  had 
been  guilty  of  a  fraud  upon  the  plaintiff. 

Now,  was  there  evidence  that  such  knowledge  was  in  the 
mind  of  the  manager  ?  The  plaintiff  had  no  knowledge  of  the 
state  of  the  accounts,  and  the  manager  made  no  communica- 
tion to  him  with  respect  to  it.  But  the  evidence  of  Davis 
was  given  for  the  purpose  of  supplying  that  part  of  the 
case ;  and  he  stated  that,  immediately  before  the  guarantee 
had  been  given,  he  went  to  the  manager,  and  told  him  it 
was  impossible  for  him  to  go  on  unless  he  got  further  sup- 
plies, and  that  the  government  were  buying  in  against  him  ; 
to  which  the  manager  replied,  that  Davis  must  go  and  try 
his  friends,  on  which  Davis  informed  the  manager  that  the 
plaintiff  would  go  no  further  unless  he  had  a  further 
guarantee.  Upon  that  the  manager  acted;  and  Davis 
added,  "I  owed  the  bank  above  £12,000."  The  result  was 
that  oats  were  supplied  by  the  plaintiff  to  Davis  to  the 
amount  of  £1,227  ;  that  Davis  carried  out  his  contract  with 
the  government,  and  that  the  commissariat  paid  him  the 
sum  of  £2,676,  which  was  paid  by  him  into  the  bank.  He 
thereupon  handed  a  check  to  the  plaintiff,  who  presented  it 


§  153.]    BARWICK  V.  ENGLISH  JOINT  STOCK  BANK.      285 

to  the  bank,  and  without  further  explanation  the  check  was 
refused. 

This  is  the  plain  state,  of  the  facts ;  and  it  was  contended 
on  behalf  of  the  bank  that,  inasmuch  as  the  guarantee  con- 
tains a  stipulation  that  the  plaintiffs  debt  should  be  paid 
subsequent  to  the  debt  of  the  bank,  which  was  to  have 
priority,  there  was  no  fraud.  "We  are  unable  to  adopt  that 
conclusion.  I  speak  sparingly,  because  we  desire  not  to 
anticipate  the  judgment  which  the  constitutional  tribunal, 
the  jury,  may  pass.  But  they  might,  upon  these  facts, 
justly  come  to  the  conclusion  that  the  manager  knew  and 
intended  that  the  guarantee  should  be  unavailing ;  that  he 
procured  for  his  employers,  the  bank,  the  government 
check,  by  keeping  back  from  the  plaintiff  the  state  of 
Davis's  account,  and  that  he  intended  to  do  so.  If  the 
jury  took  that  view  of  the  facts,  they  would  conclude  that 
there  was  such  a  fraud  in  the  manager  as  the  plaintiff 
complained   of. 

If  there  be  fraud  in  the  manager,  then  arises  the  question, 
whether  it  was  such  a  fraud  as  the  bank,  his  employers, 
would  be  answerable  for.  With  respect  to  that,  we  conceive 
we  are  in  no  respect  overruling  the  opinions  of  my  Brothers 
Martin  and  Bramwell  in  Udell  v.  Atherton,  7  H.  &  N.  172 ; 
30  L.  J.  (Exch.)  337,  the  case  most  relied  upon  for  the  pur- 
pose of  establishing  the  proposition  that  the  principal  is  not 
answerable  for  the  fraud  of  his  agent.  Upon  looking  at 
that  case,  it  seems  pretty  clear  that  the  division  of  opinion 
which  took  place  in  the  Court  of  Exchequer  arose,  not  so 
much  upon  the  question  whether  the  principal  is  answerable 
for  the  act  of  an  agent  in  the  course  of  his  business,  —  a 
question  which  was  settled  as  early  as  Lord  Holt's  time 
(Hern  v.  Nichols,  1  Salk.  289),  —  but  in  applying  that 
principle  to  the  peculiar  facts  of  the  case;  the  act  which 
was  relied  upon  there  as  constituting  a  liability  in  the  sellers 
having  been  an  act  adopted  by  them  under  peculiar  circum- 
stances, and  the  author  of  that  act  not  being  their  general 
agent  in  business,  as  the  manager  of  a  bank  is.     But  with 


286  TORTS  BY  AGENT.  [CH.  XIII. 

respect  to  the  question,  whether  a  principal  is  answerable 
for  the  act  of  his  agent  in  the  course  of  his  master's  busi- 
ness, and  for  his  master's  benefit,  no  sensible  distinction  can 
be  drawn  between  the  case  of  fraud  and  the  case  of  any 
other  wrong.  The  general  rule  is,  that  the  master  is 
answerable  for  every  such  wrong  of  the  servant  or  agent 
as  is  committed  in  the  course  of  the  service  and  for  the 
master's  benefit,  though  no  express  command  or  privity  of 
the  master  be  proved.  See  Laugher  v.  Pointer,  5  B.  & 
C.  547,  at  p.  554.  That  principle  is  acted  upon  every 
day  in  running  down  cases.  It  has  been  applied  also  to 
direct  trespass  to  goods,  as  in  the  case  of  holding  the 
owners  of  ships  liable  for  the  act  of  masters  abroad,  im- 
properly selling  the  cargo.  Ewbarik  v.  Nutting,  7  C.  B. 
797.  It  has  been  held  applicable  to  actions  of  false  im- 
prisonment, in  cases  where  officers  of  railway  companies, 
intrusted  with  the  execution  of  by-laws  relating  to  im- 
prisonment, and  intending  to  act  in  the  course  of  their 
duty,  improperly  imprison  persons  who  are  supposed  to 
come  within  the  terms  of  the  by-laws.  Qoff  v.  Great 
Northern  Railway  Company,  3  E.  &  E.  672 ;  30  L.  J. 
(Q.  B.)  148,  explaining  (at  3  E.  &  E.  p.  683)  Roe  v. 
Birkenhead  Railway  Company,  7  Exch.  36 ;  and  see  Barry 
v.  Midland  Railway  Company,  Ir.  L.  Rep.  1  C.  L.  130. 
It  has  been  acted  upon  where  persons  employed  by  the 
owners  of  boats  to  navigate  them  and  to  take  fares,  have 
committed  an  infringement  of  a  ferry,  or  such  like  wrong. 
Huzzey  v.  Field,  2  C.  M.  &  R.  432,  at  p.  440.  In  all  these 
cases  it  may  be  said,  as  it  was  said  here,  that  the  master 
has  not  authorized  the  act.  It  is  true,  he  has  not  authorized 
the  particular  act,  but  he  has  put  the  agent  in  his  place  to 
do  that  class  of  acts,  and  he  must  be  answerable  for  the 
manner  in  which  the  agent  has  conducted  himself  in  doing 
the  business  which  it  was  the  act  of  his  master  to  place 
him  in. 

The  only  other  point  which  was  made,  and  it  had  at  first 
a  somewhat  plausible  aspect,  was  this :    It  is  said,  if  it  be 


§  153.]  HASKELL  V.   STAEBLRD.  287 

established  that  the  bank  are  answerable  for  this  fraud,  it 
is  the  fraud  of  the  manager,  and  ought  not  to  have  been 
described,  as  here,  as  the  fraud  of  the  bank.  I  need  not 
go  into  the  question  whether  it  be  necessary  to  resort  to 
the  count  in  case  of  fraud,  or  whether,  under  the  circum- 
stances, money  having  been  actually  procured  for,  and 
paid  into,  the  bank,  which  ought  to  have  got  into  the 
plaintiff's  hands,  the  count  for  money  had  and  received 
is  not  applicable  to  the  case.  I  do  not  discuss  that  ques- 
tion, because  in  common-law  pleading  no  such  difficulty  as 
is  here  suggested  is  recognized.  If  a  man  is  answerable 
for  the  wrong  of  another,  whether  it  be  fraud  or  other 
wrong,  it  may  be  described  in  pleading  as  the  wrong  of 
the  person  who  is  sought  to  be  made  answerable  in  the 
action.  That  was  the  decision  in  the  case  of  Raphael  v. 
Goodman,  8  A.  &  E.  565.  The  sheriff  sued  upon  a  bond ; 
plea,  that  the  bond  was  obtained  by  the  sheriff  and  others 
by  fraud ;  proof,  that  it  was  obtained  by  the  fraud  of  the 
officer ;  held,  the  plea  was  sufficiently  proved. 

Under  these  circumstances,  without  expressing  any  opinion 
as  to  what  verdict  ought  to  be  arrived  at  by  the  jury,  espe- 
cially considering  that  the  whole  case  may  not  have  been 
before  them,  we  think  this  is  a  matter  proper  for  their 
determination,  and  there  ought,  therefore,  to  be  a  venire  de 
novo.  Venire  de  novo. 


§  153.]  HASKELL  v.   STARBIRD. 

152  Massachusetts,  117.  — 1890. 

Tort  for  false  and  fraudulent  representations  in  the  sale 
of  land.  Judgment  for  plaintiff.  Defendant  alleges  excep- 
tions. 

The  sale  was  made  by  defendant  through  an  agent.  The 
court  was  asked  to  charge  that:  "  If  the  jury  shall  find  that 
Rockwell  was  the  agent  of  the  defendant  in  selling  the  laud 


288  TORTS  BY  AGENT.  [CH.  XIII. 

in  question,  the  plaintiff  cannot  recover,  unless  it  is  proved 
that  the  defendant  was  privy  to  or  adopted  the  misrepre- 
sentation relied  on."  This  request  was  refused,  and  the 
court  charged,  in  substance,  that  if  the  agent  was  author- 
ized to  sell  the  land  the  defendant  would  be  liable  for  the 
methods  employed,  and  therefore  liable  for  the  agent's 
fraudulent  representations. 

Devens,  J.  .  .  .  The  instructions  of  the  court  upon  the 
second  request  for  a  ruling  —  which  was  in  substance,  that, 
even  if  Rockwell  was  the  agent  of  the  defendant  to  sell,  the 
plaintiff  could  not  recover  unless  it  was  proved  that  the 
defendant  was  privy  to  or  adopted  the  misrepresentations 
relied  on  —  made  the  defendant  responsible  for  the  false  and 
fraudulent  representations  as  to  the  land  made  by  Rockwell, 
if  Rockwell  was  employed  by  the  defendant  to  sell  the  land 
as  his  agent,  notwithstanding  Rockwell  was  not  authorized 
to  make  them,  and  notwithstanding  the  defendant  did  not 
know  that  he  had  made  them  until  after  the  conveyance. 
They  held  that  the  defendant,  by  employing  Rockwell  as  his 
agent  to  make  the  sale,  became  responsible  for  the  methods 
which  he  adopted  in  so  doing.  The  defendant  contends  that 
Rockwell  was  a  special  agent  only,  and  that,  as  his  authority 
extended  only  to  the  sale  of  this  single  tract  of  land,  the 
defendant  is  not  responsible  for  any  representations  Rock- 
well might  have  made  which  he  did  not  authorize. 

The  cases  in  which  a  distinction  has  been  made  in  the 
responsibility  of  a  principal  for  the  acts  of  general  and  of 
special  agents  are  those  where  the  special  agent  did  not  have, 
and  was  not  held  out  as  having,  full  authority  to  do  that 
which  he  undertook  to  do,  and  where  one  dealing  with  him 
was  informed,  or  should  have  informed  himself,  of  the  lim- 
itations of  his  authority.  There  is  no  distinction  in  the  mat- 
ter of  responsibility  for  the  fraud  of  an  agent  authorized  to 
do  business  generally,  and  of  an  agent  employed  to  conduct  a 
single  transaction,  if,  in  either  case,  he  is  acting  in  the  busi- 
ness for  which  he  was  employed  by  the  principal,  and  had  full 
authority  to  complete  the  transaction.     While  the  principal 


§  153.]     WHEELER  &  WILSON  MFG.  CO.  V.  AUGHEY.     289 

may  not  have  authorized  the  particular  act,  he  has  put  the 
agent  in  his  place  to  make  the  sale,  and  must  be  responsible 
for  the  manner  in  which  he  has  conducted  himself  in  doing 
the  business  which  the  principal  intrusted  to  him.  Benjamin 
on  Sale  (3d  Am.  ed.),  §  465.  The  rule  that  a  principal  is 
liable  civilly  for  the  neglect,  fraud,  deceit,  or  other  wrongful 
act  of  his  agent,  although  the  principal  did  not  in  fact 
authorize  the  practice  of  such  acts,  is  quoted  with  approba- 
tion by  Chief  Justice  Shaw  in  Lock  v.  Stearns,  1  Met.  560. 
That  a  principal  is  liable  for  the  false  representations  of  his 
agent,  although  personally  innocent  of  the  fraud,  is  said  by 
Mr.  Justice  Hoar,  in  White  v.  Sawyer,  16  Giay,  586,  589, 
to  be  settled  by  the  clear  weight  of  authority. 

In  the  case  at  bar,  if  the  false  representations  were  made 
by  Rockwell,  they  were  made  by  him  while  acting  within 
the  scope  of  his  authority,  in  making  a  sale  of  land  which 
the  defendant  employed  him  to  sell,  and  the  instruction 
properly  held  the  defendant  answerable  for  the  damage 
occasioned  thereby.  Lothrop  v.  Adams,  133  Mass.  471. 
The  defendant  urges  that,  even  if  in  an  action  of  contract 
the  false  representations  of  Rockwell  as  his  agent  might 
render  the  defendant  responsible  as  the  principal,  he  cannot 
thus  be  made  responsible  in  an  action  of  tort  for  deceit,  and 
that  in  such  action  the  misrepresentation  must  be  proved  to 
have  been  that  of  the  principal.  It  is  sufficient  to  say,  that 
no  such  point  was  presented  at  the  trial,  nor  do  we  consider 
that  any  such  distinction  exists.  .  .  . 

Exceptions  overruled. 


§  153.]     WHEELER  AND  WILSON  MFG.  CO.  v. 
AUGHEY. 

144  Pennsylvania  State,  398.  — 1891. 

[Reported  herein  at  p.  50.] 
19 


290  TORTS  BY  AGENT.  [CH.  XITI. 


3.    Fraud  for  benefit  of  agent :  fictitious  stock. 

§§154,155.]     BRITISH    MUTUAL    BANKING   CO.   v. 
CHARNWOOD    FOREST    RAILWAY  CO. 

Law  Reports,  18  Queen's  Bench  Division  (C.  A.),  714. — 

1887. 

Appeal  from  an  order  of  the  Queen's  Bench  Division 
(Manisty  and  Mathew,  JJ.)  directing  judgment  to  be 
entered  for  the  plaintiffs. 

The  action  was  brought  to  recover  damages  for  fraudulent 
misrepresentations  alleged  to  have  been  made  by  the  defend- 
ants through  their  secretary.  At  the  trial  before  Lord 
Coleridge,  C.  J.,  it  appeared  that  certain  customers  of  the 
plaintiffs  had  applied  to  them  for  an  advance  on  the  security 
of  transfers  of  debenture  stock  of  the  defendant  company. 
The  plaintiffs'  manager  called  upon  Tremayne,  the  defend- 
ants' secretary,  and  was  informed  in  effect  that  the  transfers 
were  valid,  and  that  the  stock  which  they  purported  to 
transfer  existed.  The  plaintiffs  thereupon  made  the  ad- 
vances. It  subsequently  appeared  that  Tremayne,  in  conjunc- 
tion with  one  Maddison,  had  fraudulently  issued  certificates 
for  debenture  stock  in  excess  of  the  amount  which  the 
company  were  authorized  to  issue,  and  the  transfers  as  to 
which  the  plaintiffs  inquired  related  to  this  over-issue.  The 
plaintiffs  accordingly  lost  their  security.  The  defendants  did 
not  benefit  in  any  way  by  the  false  statements  of  Tremayne, 
which  were  made  entirely  in  the  interest  of  himself  and 
Maddison.  There  was  some  question  whether  Tremayne 
was  still  secretary  at  the  time  the  statements  were  made ; 
but  the  jury  found  that  the  inquiries  were  made  of  him  as 
secretary,  and  that  the  defendants  held  him  out  as  such  to 
answer  such  inquiries.  The  jury  assessed  the  damages,  and 
the  chief  justice  left  either  of  the  parties  to  move  for 
judgment.     A  motion  was  accordingly  made  on  behalf  of 


§§  154,  155.]      BRITISH  BKG.  CO.  V.  RAILWAY  CO.         291 

the  plaintiffs  before  Manisty  and  Mathew,  JJ.,  who  directed 
judgment  to  be  entered  for  them. 

The  defendants  appealed. 

Lord  Esher,  M.  R.  In  this  case  an  action  has  been 
brought  by  the  plaintiffs  to  recover  damages  for  fraudulent 
misrepresentation  by  the  defendants,  through  their  secretary, 
as  to  the  validity  of  certain  debenture  stock  of  the  defendant 
company.  The  defendants  are  a  corporation,  and  the  alleged 
misrepresentations  were,  in  fact,  made  by  a  person  employed 
in  the  capacity  of  their  secretary  ;  and  it  cannot  be  doubted 
that  when  he  made  the  statements  he  had  a  fraudulent  mind, 
and  made  them  knowing  them  to  be  false. 

I  differ  from  the  judgment  of  the  divisional  court,  but  I  do 
not  think  the  ground  on  which  my  decision  is  based  was 
present  to  the  minds  of  the  learned  judges.  The  point 
principally  argued  in  the  divisional  court  seems  to  have  been 
that  the  defendants  could  not  be  liable  on  account  of  their 
being  a  corporation.  It  seems  to  me,  however,  that  there  is 
a  defect  in  the  plaintiffs'  case,  irrespective  of  the  question 
whether  the  defendants  were  a  corporation  or  not.  The 
secretary  was  held  out  by  the  defendants  as  a  person  to 
answer  such  questions  as  those  put  to  him  in  the  interest  of 
the  plaintiffs,  and  if  he  had  answered  them  falsely  on  behalf 
of  the  defendants,  he  being  then  authorized  by  them  to  give 
answers  for  them,  it  may  well  be  that  they  would  be  liable. 
But  although  what  the  secretary  stated  related  to  matters 
about  which  he  was  authorized  to  give  answers,  he  did  not 
make  the  statements  for  the  defendants,  but  for  himself. 
He  had  a  friend  whom  he  desired  to  assist  and  could  assist 
by  making  the  false  statements,  and  as  he  made  them  in  his 
own  interest  or  to  assist  his  friend,  he  was  not  acting  for  the 
defendants.  The  rule  has  often  been  expressed  in  the  terms, 
that  to  bind  the  principal  the  agent  must  be  acting  "  for  the 
benefit "  of  the  principal.  This,  in  my  opinion,  is  equivalent 
to  saying  that  he  must  be  acting  "  for"  the  principal,  since 
if  there  is  authority  to  do  the  act  it  does  not  matter  if  the 
principal  is  benefited  by  it    I  know  of  no  case  where  the 


292  TORTS   BY  AGENT.  [CH.  XHI. 

employer  has  been  held  liable  when  his  servant  has  made 
statements  not  for  his  employer,  but  in  his  own  interest. 
The  attention  of  the  learned  judges  seems  to  have  been  drawn 
off  from  this  view  of  the  case  by  the  argument  founded  on 
the  defendants  being  a  corporation,  and  I  think  their  judg- 
ment must  be  overruled. 

The  following  judgment  was  read  by 

Bowen,  L.  J.  There  is,  so  far  as  I  am  aware,  no  pre- 
cedent in  English  law,  unless  it  be  Swift  v.  Winterbotham, 
Law  Rep.  8  Q.  B.  244,  a  case  that  was  overruled  upon  appeal 
(Swift  v.  Jewsbury,  Law  Rep.  9  Q.  B.  301),  for  holding  that  a 
principal  is  liable  in  an  action  of  deceit  for  the  unauthorized 
and  fraudulent  act  of  a  servant  or  agent  committed,  not  for 
the  general  or  special  benefit  of  the  principal,  but  for  the 
servant's  own  private  ends.  The  true  rule  was,  as  it  seems 
to  me,  enunciated  by  the  Exchequer  Chamber  in  a  judgment 
of  Willes,  J.,  delivered  in  the  case  of  Barwick  v.  English 
Joint  Stock  Bank,  Law  Rep.  2  Exch.  259.  "  The  general 
rule,"  says  Willes,  J.,  "  is  that  the  master  is  answerable  for 
every  such  wrong  of  his  servant  or  agent  as  is  committed  in 
the  course  of  his  service  and  for  the  master's  benefit,  though 
no  express  command  or  privity  of  the  master  be  proved." 
This  definition  of  liability  has  been  constantly  referred  to  in 
subsequent  cases  as  adequate  and  satisfactory,  and  was  cited 
with  approval  by  Lord  Selborne  in  the  House  of  Lords  in 
Houldsworth  v.  City  of  Glasgow  Bank,  5  App.  Cas.  317. 
Mackey  v.  Commercial  Bank  of  New  Brunswick,  Law  Rep. 
5  P.  C.  394,  is  consistent  with  this  principle.  It  is  a  definition 
strictly  in  accordance  with  the  ruling  of  Martin,  B.,  in  Limpus 
v.  London  General  Omnibus  Co.,  1  H.  &  C.  526,  which  was 
upheld  in  the  Exchequer  Chamber  (see  per  Blackburn,  J.). 

It  was  argued  on  behalf  of  the  plaintiffs  in  the  present 
appeal  that  the  defendant  company,  although  they  might  not 
have  authorized  the  fraudulent  answer  given  by  the  secretary, 
had  nevertheless  authorized  the  secretary  to  do  "  that  class 
of  acts  "  of  which  the  fraudulent  answer,  it  was  said,  was 
one.     This  is  a  misapplication  to  a  wholly  different  case  of 


§§  154,  155.]      BRITISH  BKG.  CO.  V.  RAILWAY  CO.        293 

an  expression  which  in  Barwick  v.  English  Joint  Stock  Bank, 
Law  Rep.  2  Exch.  259,  was  perfectly  appropriate  with  regard 
to  the  circumstances  there.  In  that  case  the  act  done,  though 
not  expressly  authorized,  was  done  for  the  master's  benefit. 
With  respect  to  acts  of  that  description,  it  was  doubtless 
correct  to  say  that  the  agent  was  placed  there  to  do  acts  of 
"that  class."  Transferred  to  a  case  like  the  present,  the 
expression  that  the  secretary  was  placed  in  his  office  to  do 
acts  of  "  that  class  "  begs  the  very  question  at  issue  ;  for  the 
defendants'  proposition  is,  on  the  contrary,  that  an  act  done 
not  for  the  employer's  benefit,  but  for  the  servant's  own 
private  ends,  is  not  an  act  of  the  class  which  the  secretary 
either  was  or  could  possibly  be  authorized  to  do.  It  is  said 
that  the  secretary  was  clothed  ostensibly  with  a  real  or 
apparent  authority  to  make  representations  as  to  the  genuine- 
ness of  the  debentures  in  question  ;  but  no  action  of  contract 
lies  for  a  false  representation  unless  the  maker  of  it  or  his 
principal  has  either  contracted  that  the  representation  is  true, 
or  is  estopped  from  denying  that  he  has  done  so.  In  the 
present  case  the  defendant  company  could  not  in  law  have  so 
contracted,  for  any  such  contract  would  have  been  beyond 
their  corporate  powers.  And  if  they  cannot  contract,  how 
can  they  be  estopped  from  denying  that  they  have  done  so? 
The  action  against  them,  therefore,  to  be  maintainable  at  all, 
must  be  an  action  of  tort  founded  on  deceit  and  fraud.  But 
how  can  a  company  be  made  liable  for  a  fraudulent  answer 
given  by  their  officer  for  his  own  private  ends,  by  which  they 
could  not  have  been  bound  if  they  had  actually  authorized 
him  to  make  it,  and  promised  to  be  bound  by  it?  The  ques- 
tion resolves  itself  accordingly  into  a  dilemma.  The  fraudu- 
lent answer  must  have  either  been  within  the  scope  of  the 
agent's  employment  or  outside  it.  It  could  not  be  within  it, 
for  the  company  had  no  power  to  bind  themselves  to  the 
consequences  of  any  such  answer.  If  it  is  not  within  it,  on 
what  ground  can  the  company  be  made  responsible  for  an 
agent's  act  done  beyond  the  scope  of  his  employment,  and 
from  which  they  derived  no  benefit?    This  shows  that  the 


294  TORTS  BY  AGENT.  [CBL  XIH. 

proposition  that  the  secretary  in  the  present  case  was  em- 
ployed to  do  that  "class  of  acts"  is  fallacious,  and  cannot 
be  maintained.  The  judgment  of  the  court  below  is  based 
upon  the  view  that  the  act  done  was  in  fact  within  the  scope 
of  the  secretary's  employment ;  and  if  this  proposition  cannot 
be  maintained,  the  judgment  must  fall  with  it.  How  far  a 
statutory  corporate  body  could  in  any  case  be  made  liable  in 
an  action  for  deceit  beyond  the  extent  of  the  benefits  they 
have  reaped  by  the  fraud  is  a  matter  upon  which  I  desire  to 
express  no  opinion,  for  none  is  necessary  to  the  decision 
here  ;  but  even  if  the  principals  in  the  present  case  were  not 
a  statutory  body,  with  limited  powers  of  contracting  and  of 
action,  I  think  there  would  be  danger  in  departing  from  the 
definition  of  liability  laid  down  by  Willes,  J.,  in  Barwick  v. 
English  Joint  Stock  Bank,  Law  Rep.  2  Exch.  259,  and  in 
extending  the  responsibility  of  a  principal  for  the  frauds 
committed  by  a  servant  or  agent  beyond  the  boundaries 
hitherto  recognized  by  English  law.  I  think,  therefore,  that 
this  appeal  must  be  allowed,  with  costs. 

Fry,  L.  J.  I  agree  in  the  view  that  the  appeal  must  be 
allowed.  It  appears  to  me  that  the  case  is  one  of  an  action 
for  fraudulent  misrepresentation  made  by  a  servant,  who  in 
making  it  was  acting  not  in  the  interest  of  his  employers,  but 
in  his  own  interest.  It  is  plain  that  the  action  cannot  suc- 
ceed on  any  ground  of  estoppel,  for  otherwise  the  defendants 
would  be  estopped  from  denying  that  the  stock  was  good. 
No  corporate  body  can  be  bound  by  estoppel  to  do  some- 
thing beyond  their  powers.  The  action  cannot  be  supported, 
therefore,  on  that  ground.  Nor  can  it  be  supported  on  the 
ground  of  direct  authority  to  make  the  statements.  Neither 
can  it  be  supported  on  the  ground  that  the  company  either 
benefited  by,  or  accepted  or  adopted  any  contract  induced  or 
produced  by  the  fraudulent  misrepresentation.  I  can  see  no 
ground  for  maintaining  the  action,  and  the  appeal  must  be 
allowed. 

Appeal  allowed. 


§§  154,  155.]      FIFTH  AVE.   BANK  V.   FEKEY  CO.         295 


§§  154,  155.]  FIFTH  AVENUE  BANK  v.  FORTY- 
SECOND  STREET  AND  GRAND  STREET 
FERRY  CO. 

137  New  York,  231.  — 1893. 

Action  to  recover  damages  for  loss  sustained  by  plaintiff 
in  consequence  of  the  issue  by  defendant's  agent  of  false 
and  fraudulent  certificates  of  stock.     Judgment  for  plaintiff. 

Plaintiff  took  from  H.  a  certificate  of  stock  purporting  to 
be  issued  by  defendant.  In  fact  the  certificate  was  spurious, 
the  signature  of  the  president  being  forged  by  one  Allen, 
who  was  the  defendant's  agent  for  countersigning  certificates, 
and  who  had  countersigned  this,  and  delivered  it  to  H.  for 
the  purpose  of  borrowing  money  upon  it.  Before  taking  the 
certificate  plaintiff  inquired  at  defendant's  office  as  to  its 
genuineness,  and  was  informed  by  Allen  that  it  was  genu- 
ine, and  that  H.  was  the  registered  holder  of  it.  Later, 
plaintiff  took  another  like  certificate,  but  without  making 
inquiries  as  to  its  genuineness.  Defendant  refused  to 
recognize  these  certificates. 

Plaintiff  recovered  upon  the  first  certificate,  but  not  on  the 
second.     Defendant  alone  appeals. 

Maynard,  J.  ...  It  is  very  clear  that  under  the  regula- 
tions adopted  by  the  defendant,  and  pursuing  the  mode  of 
procedure  which  it  has  prescribed,  the  final  act  in  the  issue 
of  a  certificate  of  stock  was  performed  by  its  secretary  and 
transfer  agent,  and  that  when  he  countersigned  it  and  affixed 
the  corporate  seal,  and  delivered  it  with  the  intent  that  it 
might  be  negotiated,  it  must  be  regarded,  so  long  as  it  re- 
mained outstanding,  as  a  continuing  affirmation  by  the  de- 
fendant that  it  had  been  lawfully  issued,  and  that  all  the 
conditions  precedent  upon  which  the  right  to  issue  it  depended 
had  been  duly  observed.  Such  is  the  effect  necessarily  im- 
plied in  the  act  of  countersigning.  This  word  has  a  well- 
defined  meaning,  both  in  the  law  and  in  the  lexicon.     To 


296  TORTS  BY  AGENT.  [CH.  TTTT. 

countersign  an  instrument  is  to  sign  what  has  already  been 
signed  by  a  superior,  to  authenticate  by  an  additional 
signature,  and  usually  has  reference  to  the  signature  of  a 
subordinate  in  addition  to  that  of  his  superior  by  way  of 
authentication  of  the  execution  of  the  writing  to  which  it  is 
affixed,  and  it  denotes  the  complete  execution  of  the  paper. 
( Worcester's  Die.)  When,  therefore,  the  defendant's  secre- 
tary and  transfer  agent  countersigned  and  sealed  this  certifi- 
cate and  put  it  in  circulation,  he  declared,  in  the  most  formal 
manner,  that  it  had  been  properly  executed  by  the  defendant, 
and  that  every  essential  requirement  of  law  and  of  the  by- 
laws had  been  performed  to  make  it  the  binding  act  of  the 
company.  The  defendant's  by-laws  elsewhere  illustrate  the 
application  of  the  term  when  used  with  reference  to  the  sig- 
natures of  its  officers.  In  section  10  it  is  provided  that  all 
moneys  received  by  the  treasurer  should  be  deposited  in 
bank  to  the  joint  credit  of  the  president  and  treasurer,  to  be 
drawn  out  only  by  the  check  of  the  treasurer,  countersigned 
by  the  president.  If  the  president  should  forge  the  name 
of  the  treasurer  to  a  check,  and  countersign  it  and  put  it  in 
circulation,  and  use  the  proceeds  for  his  individual  benefit, 
we  apprehend  it  would  not  be  doubted  that  this  would  be 
regarded  as  a  certificate  of  the  due  execution  of  the  check, 
so  far  as  to  render  the  company  responsible  to  any  person 
who  innocently  and  in  good  faith  became  the  holder  of  it. 

This  result  follows  from  the  application  of  the  funda- 
mental rules  which  determine  the  obligations  of  a  principal 
for  the  acts  of  his  agent.  They  are  embraced  in  the  compre- 
hensive statement  of  Story  in  his  work  on  Agency  (9th  ed. 
§  452),  that  the  principal  is  to  be  "  held  liable  to  third  per- 
sons in  a  civil  suit  for  the  frauds,  deceits,  concealments, 
misrepresentations,  torts,  negligences,  and  other  malfea- 
sances, or  misfeasances  and  omissions  of  duty  of  his  agent  in 
the  course  of  his  employment,  although  the  principal  did  not 
authorize,  or  justify,  or  participate  in,  or,  indeed,  know  of 
such  misconduct,  or  even  if  he  forbade  the  acts  or  disap- 
proved of  them.     In  all  such  cases  the  rule  applies  respondeat 


§§  154,  155.]      FIFTH  AVE.   BANK  V.   FERRY  CO.  297 

superior,  and  is  founded  upon  public  policy  and  convenience, 
for  in  no  other  way  could  there  be  any  safety  to  third  persons 
in  their  dealings,  either  directly  with  the  principal,  or  in- 
directly with  him  through  the  instrumentality  of  agents.  In 
every  such  case  the  principal  holds  out  his  agent  as  compe- 
tent and  fit  to  be  trusted,  and  thereby,  in  effect,  he  warrants 
his  fidelity  and  good  conduct  in  all  matters  within  the  scope 
of  the  agency."  It  is  true  that  the  secretary  and  transfer 
agent  had  no  authority  to  issue  a  certificate  of  stock,  except 
upon  the  surrender  and  cancellation  of  a  previously  existing 
valid  certificate,  and  the  signature  of  the  president  and  treas- 
urer first  obtained  to  the  certificate  to  be  issued ;  but  these 
were  facts  necessarily  and  peculiarly  within  the  knowledge 
of  the  secretary,  and  the  issue  of  the  certificate  in  due  form 
was  a  representation  by  the  secretary  and  transfer  agent  that 
these  conditions  had  been  complied  with,  and  that  the  facts 
existed  upon  which  his  right  to  act  depended.  It  was  a  cer- 
tificate apparently  made  in  the  course  of  his  employment  as 
the  agent  of  the  company  and  within  the  scope  of  the  general 
authority  conferred  upon  him  ;  and  the  defendant  is  under  an 
implied  obligation  to  make  indemnity  to  the  plaintiff  for  the 
loss  sustained  by  the  negligent  or  wrongful  exercise  by  its 
officers  of  the  general  powers  conferred  upon  them.  Griswold 
v.  Haven,  25  N.  Y.  595  ;  N.  Y.  &  N.  H.  B.  B.  Co.  v.  Schuy- 
ler, 34  Id.  30  ;  Titus  v.  G.  W.  Turnpike  Co.,  61  Id.  237 ;  Bank 
ofBatavia  v.  N.  Y,  L.  E.  &  W.  B.  B.  Co.,  106  Id.  195.  The 
learned  counsel  for  the  defendant  seeks  to  distinguish  this 
case  from  the  authorities  cited  because  the  signature  of  the 
president  to  the  certificate  was  not  genuine  ;  but  we  cannot 
see  how  the  forgery  of  the  name  of  the  president  can  relieve 
the  defendant  from  liability  for  the  fraudulent  acts  of  its 
secretary,  treasurer,  and  transfer  agent.  They  were  officers 
to  whom  it  had  intrusted  the  authority  to  make  the  final 
declaration  as  to  the  validity  of  the  shares  of  stock  it  might 
issue,  and  where  their  acts,  in  the  apparent  exercise  of  this 
power,  are  accompanied  with  all  the  indicia  of  genuineness, 
it  is  essential    to  the   public  welfare  that   the  principal 


298  TOETS  BY  AGENT.  [CH.  XHL 

should  be  responsible  to  all  persons  who  receive  the  certifi- 
cates in  good  faith  and  for  a  valuable  consideration  and 
in  the  ordinary  course  of  business,  whether  the  indicia 
are  true  or  not.  Beach  on  Pr.  Cor.  vol.  2,  p.  790 ;  North 
River  Bank  v.  Aymar,  3  Hill,  262 ;  Jarvis  v.  Manhattan 
Beach  Co.,  53  Hun,  362 ;  Tome  v.  Parkersburg  Branch,  39 
Md.  36  ;  Baltimore,  &c.  R.  Co.  v.  Wilkens,  44  Id.  11  ;  West- 
ern M.  R.  Co.  v.  Franklin  Bank,  60  Id.  36 ;  Com.  v.  Bank, 
137  Mass.  431  ;  Holden  v.  Phelps,  141  Id.  456 ;  Manhattan 
Beach  Co.  v.  Harned,  27  Fed.  Rep.  484  ;  Shaw  v.  Port  Phillip 
&  Co.,  13  Q.  B.  D.  103. 

The  rule  is,  we  think,  correctly  stated  in  Beach  on 
Private  Corporations  (Vol.  2,  §  488,  p.  791):  "When  cer- 
tificates of  stock  contain  apparently  all  the  essentials  of 
genuineness,  a  bond  fide  holder  thereof  has  a  claim  to 
recognition  as  a  stockholder,  if  such  stock  can  legally  be 
issued,  or  to  indemnity  if  this  cannot  be  done.  The  fact 
of  forgery  does  not  extinguish  his  right  when  it  has  been 
perpetrated  by  or  at  the  instance  of  an  officer  placed  in 
authority  by  the  corporation,  and  intrusted  with  the  custody 
of  its  stock-books,  and  held  out  by  the  company  as  the 
source  of  information  upon  the  subject." 

Having  reached  the  conclusion  that  the  defendant  is  liable 
for  the  representations  of  its  officers,  appearing  upon  the 
face  of  its  certificate  over  their  official  signature  and  under 
the  seal  of  the  corporation,  we  do  not  deem  it  necessary  to 
consider  the  effect  of  the  oral  representations  made  at  the 
office  of  the  company  to  the  plaintiff's  clerk,  except  so  far 
as  they  bear  upon  the  question  of  the  good  faith  of  the 
plaintiff  in  the  acquisition  of  the  certificate. 

The  judgment  and  order  must  be  affirmed  with  costs. 

All  concur.  Judgment  affirmed. 


§  156.]        FBTEDLANDEB  V.  TEXAS  &  PACIFIC  RY.        299 


4.   Fraud  for  benefit  of  agent :  fictitious  bills  of  lading. 

§  156.]  FRIEDLANDER  v.  TEXAS  &  PACIFIC 
RAILWAY  CO. 

130  United  States,  416.  — 1889. 

Action  for  damages  for  non-delivery  of  cotton  named  in 
a  bill  of  lading.     Judgment  for  defend^t- 

Defendant's  shipping  agent  issued  to  one  Lahn  stein  a  bill 
of  lading  for  cotton  in  the  usual  form.  In  fact  no  cotton 
was  shipped,  and  the  agent  and  Lahnstein  were  in  collusion 
to  obtain  money  upon  the  bill  of  lading.  Lahnstein  indorsed 
the  bill  of  lading  and  attached  it  to  a  draft  drawn  on  plain- 
tiffs, which  draft  plaintiffs  accepted  and  paid  in  good  faith. 

Mr.  Chief  Justice  Fuller  delivered  the  opinion  of  the 
court. 

The  agreed  statement  of  facts  sets  forth  "that,  in  point 
of  fact,  said  bill  of  lading  of  November  6,  1883,  was  exe- 
cuted by  said  E.  D.  Easton,  fraudulently  and  by  collusion 
with  said  Lahnstein,  and  without  receiving  any  cotton  for 
transportation,  such  as  is  represented  in  said  bill  of  lading, 
and  without  the  expectation  on  the  part  of  the  said  Easton 
of  receiving  any  such  cotton ; "  and  it  is  further  said  that 
Easton  and  Lahnstein  had  fraudulently  combined  in  another 
case,  whereby  Easton  signed  and  delivered  to  Lahnstein  a 
similar  bill  of  lading  for  cotton  "which  had  not  been 
received,  and  which  the  said  Easton  had  no  expectation  of 
receiving  ;  "  and  also  "  that,  except  that  the  cotton  was  not 
received  nor  expected  to  be  received  by  said  agent  when 
said  bill  of  lading  was  by  him  executed  as  aforesaid,  the 
transaction  was,  from  first  to  last,  customary."  In  view  of 
this  language,  the  words  u  for  transportation,  such  as  is 
represented  in  said  bill  of  lading,"  cannot  be  held  to  operate 
as  a  limitation.  The  inference  to  be  drawn  from  the  state- 
ment is  that  no  cotton  whatever  was  delivered  for  transpor- 
tation to  the  agent  at  Sherman  station. 


300  TORTS   BY  AGENT.  [CH.  XTTT. 

The  question  arises,  then,  whether  the  agent  of  a  railroad 
company  at  one  of  its  stations  can  bind  the  company  by  the 
execution  of  a  bill  of  lading  for  goods  not  actually  placed 
in  his  possession,  and  its  delivery  to  a  person  fraudulently 
pretending  in  collusion  with  such  agent  that  he  had  shipped 
such  goods,  in  favor  of  a  party  without  notice,  with  whom, 
in  furtherance  of  the  fraud,  the  pretended  shipper  negotiates 
a  draft,  with  the  false  bill  of  lading  attached.  Bills  of 
exchange  and  promissory  notes  are  representatives  of  money, 
circulating  in  the  commercial  world  as  such,  and  it  is  essen- 
tial, to  enable  them  to  perform  their  peculiar  functions,  that 
he  who  purchases  them  should  not  be  bound  to  look  beyond 
the  instrument,  and  that  his  right  to  enforce  them  should 
not  be  defeated  by  anything  short  of  bad  faith  on  his  part. 
But  bills  of  lading  answer  a  different  purpose  and  perform 
d ifferenJLfunctions.  They  are  regarded  as  so  much  cotton , 
grain,  iron,  or  other  articles  of  merchandise,  in  that  they 
arje_syjnbols  of  ownership  of  the  goods  they  cover.  And  as 
no^sale  of  goods  lost  or  stolen,  though  to  a  bond  fide  pur- 
chaser  for  value,  can  divest  the_ownership  of  the  person 
who  lost  them  or  from  whom  they  were  stolen.,  so  the  sale  of 
the  symbol,  or  mere_xepresentative  of  the  goods,  can  have 
no  such  effect,  although  it_sonje.times  happens  that  the  true 
owner,  by  negligence,  has  so  put  it  into  the  power  of  another 
to  occupy  his  position  ostensibly  as  to  estop  him  from  assert- 
ing_his  right  as  against  a  purchaser  who  has  been  misled  to 
his  hurt  by, reason  of  such  negligence.  Shaw  v.  Railroad 
Co.,  101  U.  S.  557,  563 ;  Pollard  v.  Vinton,  105  U.  S.  7,  8  ; 
Gurney  v.  Behrend,  3  El.  &  Bl.  622,  633,  634.  It  is  true 
that  while  not  negotiable  as  commercial  paper  is,  bills  of 
lading  are  commonly  used  as  security  for  loans  and  ad- 
vances ;  but  it  is  only  as  evidence  of  ownership,  special  or 
general,  of  the  property  mentioned  in  them,  and  of  the  right 
to  receive  such  property  at  the  place  of  delivery. 

Such  being  the  character  of  a  bill  of  lading,  can  a  recov- 
ery be  had  against  a  common  carrier  for  goods  never  actually 
in  its  possession  for  transportation,  because  one  of  its  agents, 


§  156.]        FKIEDLANDEIl  V.  TEXAS  &  PACIFIC  EY.        301 

having  authority  to  sign  bills  of  lading,  by  collusion  with 
another  person  issues  the  document  in  the  absence  of  any 
goods  at  all  ? 

It  has  been  frequently  held  by  this  court  that  the  master 
of  a  vessel  has  no  authority  to  sign  a  bill  of  lading  for 
goods  not  actually  put  on  board  the  vessel,  and,  if  he  does 
so,  his  act  does  not  bind  the  owner  of  the  ship  even  in  favor 
of  an  innocent  purchaser.  The  Freeman  v.  Buckingham, 
18  How.  182,  191  ;  The  Lady  Franklin,  8  Wall.  325;  Pol- 
lard v.  Vinton,  105  U.  S.  7.  And  this  agrees  with  the  rule 
laid  down  by  the  English  courts.  Lickbarrow  v.  Mason, 
2  T.  R.  77 ;  Grant  v.  Norway,  10  C.  B.  665  ;  Cox  v.  Bruce, 
18  Q.  B.  D.  147.  "  The  receipt  of  the  goods,"  said  Mr. 
Justice  Miller,  in  Pollard  v.  Vinton,  supra,  "  lies  at  the 
foundation  of  the  contract  to  carry  and  deliver.  If  no 
goods  are  actually  received,  there  can  be  no  valid  contract 
to  carry  or  to  deliver."  "And  the  doctrine  is  applicable  to 
transportation  contracts  made  in  that  form  by  railway  com- 
panies and  other  carriers  by  land,  as  well  as  carriers  by  sea," 
as  was  said  by  Mr.  Justice  Matthews  in  Iron  Mountain  Rail- 
way v.  Knight,  122  U.  S.  79,  87,  he  adding  also :  "  If  Potter 
(the  agent)  had  never  delivered  to  the  plaintiff  in  error  any 
cotton  at  all  to  make  good  the  five  hundred  and  twenty-five 
bales  called  for  by  the  bills  of  lading,  it  is  clear  that  the 
plaintiff  in  error  would  not  be  liable  for  the  deficiency.  This 
is  well  established  by  the  cases  of  The  Schooner  Freeman  v. 
Buckingham,  18  How.  182,  and  Pollard  v.  Vinton,  105  U.  S.  7." 

It  is  a  familiar  principle  of  law  that  where  one  of  two 
innocent  parties  must  suffer  by  the  fraud  of  another,  the 
loss  should  fall  upon  him  who  enabled  such  third  person  to 
commilL_thfi_Jraiid ;  but  nothing  that  the  railroad  company 
did  or  omitted  to  do  can  be  properly  said  to  have  enabled 
Lahnstein  to  impose  upon  Friedlander  &  Co-  The  company 
not  only  did  not  authorize  Easton  to  sign  fictitious  bills  of 
lading,  but  it  did  not  assume  authority  itself  to  issue  such 
documents,  except  upon  the  delivery  of  the  merchandise. 
Easton  was  not  the  company's  agent  in  the  transaction,  for 


302  TORTS  BY  AGENT.  [CH.  XIH. 

there  was  nothing  upon  which  the  agency  could  act.  Railroad 
companies  are  not  dealers  in  bills  of  exchange,  no£  in  bills 
of  lading j_they  are  carriers  only,  and  held  to  rigid  respon- 
sibiUty^asjmclu  Easton,  disregarding  the  object  for  which 
he  was  employed,  and  not  intending  by  his  act  to  execute 
it,  but  wholly  for  a  purpose  of  his  own  and  of  Lahnstein, 
became  particeps  criminis  with  the  latter  in  the  commission 
of  the  fraud  upon  Friedlander  &  Co.,  and  it  would  be  going 
too  far  to  hold  the  company,  under  such  circumstances, 
estopped  from  denying  that  it  had  clothed  this  agent  with 
apparent  authority  to  do  au  act  so  utterly  outside  the  scope 
of  his  employment  and  of  its  own  business.  The  defendant 
cannot  be  held  on  contract  as  a  common  carrier,  in  the 
absence^f_goojs^8hipment?  and  shipper  j  nor  is  the  action 
maintainable  on  the  ground_of  tort.  "The  general  rule," 
said  Willes,  J.,  in  Barwick  v.  English  Joint  Stock  Bank, 
L.  R.  2  Exch.  259,  265,  "is__that  the  master  is  ftnswerahjft 
for_every  such  wrong  of  the  servant  or  agent  as  is  committed 
in_the  course  of  the  service  and^or_the^jaaster,s  benefit, 
though  nq_ex£ress_cpn^ajad..or_rmvity  of  the  master  be 
proved."  See  also  Limpus  v.  London  General  Omnibus  Co., 
1  H.  &  C.  526.  The  fraud  was  in  respect  to  a  matter  within 
the  scope  of  Eastern's  employment  or  outside  of  it.  It  was 
not  within  it,  for  bills  of  lading  could  only  be  issued  for  mer- 
chandise delivered  ;  and  being  without  it,  the  company,  which 
derived  and  could  derive  no  benefit  from  the  unauthorized 
and  fraudulent  act,  cannot  be  made  responsible.  British 
Mutual  Banking  Co.  v.  Charnwood  Forest  Railway  Co.,  18 
Q.  B.  D.  714. 

The  law  can  punish  roguery,  but  cannot  always  protect  a 
purchaser  from  loss ;  and  so  fraud  perpetrated  through  the 
device  of  a  false  bill  of  lading  may  work  injury  to  an 
innocent  party,  which  cannot  be  redressed  by  a  change  of 
victim. 

Under  the  Texas  statutes  the  trip  or  voyage  commences 
from  the  time  of  the  signing  of  the  bill  of  lading  issued 
upon  the  delivery  of  the  goods,  and  thereunder  the  carrier 


§  156.]  BANK  V.  NEW  YORK,   ETC.   R.   CO.  303 

cannot  avoid  his  liability  as  such,  even  though  the  goods  are 
not  actually  on  their  passage  at  the  time  of  a  loss,  but  these 
provisions  do  not  affect  the  result  here. 

We  cannot  distinguish  the  case  in  hand  from  those  here- 
tofore decided  by  this  court,  and  in  consonance  with  the 
conclusions  therein  announced  this  judgment  must  be 

Affirmed. 


§  156.]     BANK  OF  BATAVIA  v.  NEW  YORK,  A^  P  l 
L.  E.,  &  W.  R.  COMPANY. 

106  New  York,  195.  —  1887. 

Action  for  damages  for  wrongful  issue  by  defendant, 
through  its  shipping  agent,  of  two  bills  of  lading.  J_udg= 
ment  for  plaintiff. 

Finch,  J.  It  is  a  settled  doctrine  of  the  law  of  agency  in 
this  State,  that  where  the  principal  has  clothed  his  agent 
with  power  to  do  an  act  upon  the  existence  of  some  ex- 
trinsic fact  necessarily  and  peculiarly  within  the  knowledge 
of  the  agent,  and  of  the  existence  of  which  the  act  of  exe- 
cuting the  power  is  itself  a  representation,  a  third  person 
dealing  with  such  agent  in  entire  good  faith,  pursuant  to 
the  apparent  power,  may  rely  upon  the  representation,  and 
the  principal  is  estopped  from  denying  its  truth  to  his 
prejudice.  North  River  Bank  v.  Aymar,  3  Hill,  262 ; 
Qriswold  v.  Haven,  25  N.  Y.  595,  601 ;  N.  T.  &  N.  H.  R. 
R.  Co.  v.  Schuyler,  34  Id.  30 ;  Armour  v.  M.  C.  R.  R.  Co., 
65  Id.  111.  A  discussion  of  that  doctrine  is  no  longer 
needed  or  permissible  in  this  court,  since  it  has  survived  an 
inquiry  of  the  most  exhaustive  character,  and  an  assault 
remarkable  for  its  persistence  and  vigor.  If  there  be  any 
exception  to  the  rule  within  our  jurisdiction,  it  arises  in  the 
case  of  municipal  corporations,  whose  structure  and  func- 
tions are  sometimes  claimed  to  justify  a  more  restricted 
liability.    The  application  of  this  rule  to  the  case  at  bar  has 


304  TORTS  BY  AGENT.  [CH.  XHL 

determined  it  in  favor  of  the  plaintiff,  and  we  approve  of 
that  conclusion. 

One  Weiss  was  the  local  freight  agent  of  the  defendant  cor- 
poration at  Batavia,  whose  duty  and  authority  it  was  to  receive 
and  forward  freight  over  the  defendant's  road,  giving  a  bill 
of  lading  therefor  specifying  the  terms  of  the  shipment,  but 
having  no  right  to  issue  such  bills  except  upon  the  actual  re- 
ceipt of  the  property  for  transportation.  He  issued  bills  of 
lading  for  sixty-five  barrels  of  beans  to  one  Williams,  describ- 
ing them  as  received  to  be  forwarded  to  one  Comstock,  as  con- 
signee, but  adding  with  reference  to  the  packages  that  their 
contents  were  unknown.  Williams  drew  a  draft  on  the  con- 
signee, and  procured  the  money  upon  it  of  the  plaintiff  by 
transferring  the  bills  of  lading  to  secure  its  ultimate  payment. 
It  turned  out  that  no  barrels  of  beans  were  shipped  by  Wil- 
liams, or  delivered  to  the  defendant,  and  the  bills  of  lading 
were  the  product  of  a  conspiracy  between  him  and  Weiss  to 
defraud  the  plaintiff  or  such  others  as  could  be  induced  to 
advance  their  money  upon  the  faith  of  the  false  bills. 

It  is  proper  to  consider  only  that  part  of  the  learned  and 
very  able  argument  of  the  appellant's  counsel  which  ques- 
tions the  application  of  the  doctrine  above  stated  to  the 
facts  presented.  So  much  of  it  as  rests  upon  the  ground 
that  no  privity  existed  between  the  defendant  and  the  bank 
may  be  dismissed  with  the  observation  that  no  privity  is 
needed  to  make  the  estoppel  available  other  than  that  which 
flows  from  the  wrongful  act  and  the  consequent  injury. 
JV.  Y.  &  N.  H.  R.  R.  Co.  v.  Schuyler,  supra. 

While  bills  of  lading  are  not  negotiable  in  the  sense  appli- 
cable to  commercial  paper,  they  are  very  commonly  trans- 
ferred as  security  for  loans  and  discounts,  and  carry  with 
them  the  ownership,  either  general  or  special,  of  the  prop- 
erty which  they  describe.  It  is  the  natural  and  necessary 
expectation  of  the  carrier  issuing  them  that  they  will  pass 
freely  from  one  to  another,  and  advances  be  made  upon 
their  faith,  and  the  carrier  has  no  right  to  believe,  and  never 
does  believe,  that  their  office  and  effect  is  limited  to  the 


§  156.]  BANK  V.  NEW  YORK,   ETC.   R.   CO.  305 

person  to  whom  they  are  first  and  directly  issued.  On  the 
contrary,  he  is  bound  by  law  to  recognize  the  validity  of 
transfers,  and  to  deliver  the  property  only  upon  the  pro- 
duction and  cancellation  of  the  bill  of  lading:. 

If  he  desires  to  limit  his  responsibility  to  a  delivery  tojthe 
named  consignee  alone,  he  must  stamp  his  bills  as  "  non- 
negotiable  ; "  and  where  he  does  not  do  that,  he  must  be 
understood  to  intend  a  possible  transfer  of  the  bills  and  to 
affect  the  action  of  such  transferees.  In  such  a  case,  the 
facts  go  far  beyond  the  instance  cited,  in  which  an  estoppel 
has  been  denied  because  the  representations  were  not  made 
to  the  party  injured.  Mayenborg  v.  Haynes,  50  N.  Y.  675  ; 
Maguire  v.  Selden,  103  N.  Y.  642.  Those  were  cases  in 
which  the  representations  made  were  not  intended,  and  could 
not  be  expected  to  influence  the  persons  who  relied  upon 
them,  and  their  knowledge  of  them  was  described  as  purely 
accidental  and  not  anticipated.  Here  they  were  of  a  totally 
different  character.  The  bills  were  made  for  the  precise 
purpose,  so  far  as  the  agent  and  Williams  were  concerned, 
of  deceiving  the  bank  by  their  representations,  and  every 
bill  issued  not  stamped  was  issued  with  the  expectation  o_f 
the  principal  that  it  would  be  transferred  and  used  in  the 
ordinary  channels  of  business,  and  be  relied  upon  as  evidence 
of  ownership  or  security  for  advances.  Those  thus  trusting 
to  it  and  affected  by  it  are  not  accidentally  injured,  but  have 
done  what  they  who  issued  the  bill  had  every  reason  to  ex- 
pect. Considerations  of  this  character  provide  the  basis  of 
an  equitable  estoppel,  without  reference  to  negotiability  or 
directness  of  representation. 

It  is  obvious,  also,  upon  the  case  as  presented,  that  the 
fact  or  condition  essential  to  the  authority  of  the,  agent  to 
issue  the  bills  of  lading  was  one  unknown  to  the  bank  and 
peculiarly  within  the  knowledge  of  the  agent  and  his  prin- 
cipal;. Tf  the  rnlff  ^mppllprl  thp  tr<i neforpp  fn  innnr  the,  peril 
of  the  existence  or  absence  of  the  essential  fact,  it  would 
practically  end  the  large  volume  _of  business  founded  upon 
tamafem  nf  hills,  of  lading.     Of  whom  shall  the  lender  in- 

20 


306  TORTS  BY  AGENT.  [CH.  XIII. 

quire,  and  how  ascertain  the  fact?  Naturally  be  would  go 
to  the  freight  agent,  who  had  alreadj'  falsety  declared  in 
writing  that  the  property  had  been  received.  Is  be  anj*  more 
authorized  to  make  the  verbal  representation  than  the  written 
one?  Must  tbe  lender  get  permission  to  go  through  the 
freight-house  or  examine  the  books?  If  the  property  is 
grain,  it  may  not  be  eas3T  to  identify,  and  the  books,  if  dis- 
closed, are  the  work  of  the  same  freight  agent.  It  seems 
very  clear  that  the  vital  fact  of  the  shipment  is  one  peculiarly 
within  the  knowledge  of  the  carrier  and  his  agent,  and  quite 
certain  to  be  unknown  to  the  transferee  of  the  htt]  of  lading,  ex- 
cept as  he  relies  upon  the  representation  of  the  freight  agent. 

The  recital  in  the  bills  that  the  contents  of  the  packages 
were  unknown  would  have  left  the  defendant  free  from  re- 
sponsibility for  a  variance  in  the  actual  contents  from  those 
described  in  the  bill,  but  is  no  defence  where  nothing  is 
shipped  and  the  bill  is  wholly  false.  The  carrier  cannot 
defend  one  wrong  by  presuming  that  if  it  had  not  occurred 
another  might  have  taken  its  place.  The  presumption  is 
the  other  way ;  that  if  an  actual  shipment  had  been  made,  the 
property  really  delivered  would  have  corresponded  with  the 
description  in  the  bills. 

The  facts  of  the  case  bring  it,  therefore,  within  the  rule  of 
estoppel  as  it  is  established  in  this  court,  and  justify  the 
decision  made. 

The  judgment  should  be  affirmed,  with  costs.     All  concur. 

Judgment  affirmed. 


5.  Fraud  for  benefit  of  agent :  forged  telegram. 

§  157.]  M'CORD  v.  WESTERN  UNION  TELEGRAPH 
COMPANY. 

39  Minnesota,  181.  —  1888. 

Appeal  from   an    order  overruling    a  demurrer  to   the 
complaint.     The  opinion  states  the  facts. 


§  157.]    m'cord  v.  western  union  tel.  co.  307 

Vanderburgh,  J.  Dudley  &  Co.,  who  resided  at  Grove 
City,  Minn.,  were  the  agents  of  plaintiff  for  the  purchase  of 
wheat  for  him.  He  resided  at  Minneapolis,  and  was  in  the 
habit  of  forwarding  money  to  them,  to  be  used  in  making 
such  purchases,  in  response  to  telegrams  sent  over  the 
defendant's  line,  and  delivered  to  him  by  it.  On  the  first 
day  of  February,  1887,  the  defendant  transmitted  and 
delivered  to  plaintiff  the  following  message,  viz. : 

Gbove  City,  Minn.,  February  1,  1887. 

To  T.  M.  M'Cord  &  Co. :  Send  one  thousand  or  fifteen 
hundred  to-morrow. 

Dudley  &  Co. 

The  plaintiff  in  good  faith  acted  upon  this  request, 
believing  it  to  be  genuine,  and,  in  accordance  with  his 
custom,  forwarded  through  the  American  Express  Company 
the  sum  of  $1,500  in  currency,  properly  addressed  to  Dudley 
&  Co.,  at  Grove  City.  It  turned  out,  however,  that  this 
despatch  was  not  sent  by  Dudley  &  Co.,  or  with  their 
knowledge  or  authority ;  but  it  was,  in  fact,  false  and 
fraudulent,  and  was  written  and  sent  by  the  agent  of  the 
defendant  at  Grove  City,  whose  business  it  was  to  receive 
and  transmit  messages  at  that  place.  He  was  also  at  the 
same  time  the  agent  of  the  American  Express  Company  for 
the  transaction  of  its  business,  and  for  a  long  time  previous 
to  the  date  mentioned  had  so  acted  as  agent  for  both  com- 
panies at  Grove  City,  and  was  well  informed  of  plaintiff's 
method  of  doing  business  with  Dudley  &  Co.  On  the 
arrival  of  the  package  by  express  at  Grove  City,  contain- 
ing the  sum  named,  it  was  intercepted  and  abstracted  by 
the  agent,  who  converted  the  same  to  his  own  use.  The 
despatch  was  delivered  to  the  plaintiff,  and  the  money 
forwarded  in  the  usual  course  of  business.  These  facts,  as 
disclosed  by  the  record,  are  sufficient,  we  think,  to  establish 
the  defendant's  liability  in  this  action. 

1.  Considering  the  business  relations  existing  between 
plaintiff  and  Dudley  &  Co.,  the  despatch  was  reasonably 


308  TOETS  BY  AGENT.  [CH.  XHL 

interpreted  to  mean  a  requisition  for  one  thousand  or  fifteen 
hundred  dollars. 

2.  As  respects  the  receiver  of  the  message,  it  is  entirely 
immaterial  upon  what  terms  or  consideration  the  telegraph 
company  undertook  to  send  the  message.  It  is  enough  that 
the  message  was  sent  over  the  line,  and  received  in  due 
course  by  the  plaintiff,  and  acted  on  by  him  in  good  faith. 
The  action  is  one  sounding  in  tort,  and  based  upon  the 
claim  that  the  defendant  is  liable  for  the  fraud  and  mis- 
feasance of  its  agent  in  transmitting  a  false  message  pre- 
pared by  himself.  New  York,  &c.  Tel.  Co.  v.  Dryburg,  35 
Pa.  St.  298,  78  Am.  Dec.  338 ;  Gray,  Tel.  §  75. 

3.  The  principal  contention  of  defendant  is,  however,  that 
the  corporation  is  not  liable  for  the  fraudulent  and  tortious 
act  of  the  agent  in  sending  the  message,  and  that  the  maxim 
respondeat  superior  does  not  apply  in  such  a  case,  because 
the  agent  in  sending  the  despatch  was  not  acting  for  his 
master,  but  for  himself  and  about  his  own  business,  and 
was,  in  fact,  the  sender,  and  to  be  treated  as  having  tran- 
scended his  authority,  and  as  acting  outside  of,  and  not  in, 
the  course  of  his  employment,  nor  in  furtherance  of  his 
master's  business.  But  the  rule  which  fastens  a  liability 
upon  the  master  to  third  persons  for  the  wrongful  and 
unauthorized  acts  of  his  servant  is  not  confined  solely  to 
that  class  of  cases  where  the  acts  complained  of  are  done  in 
the  course  of  the  employment  in  furtherance  of  the  master's 
business  or  interest,  though  there  are  many  cases  which  fall 
within  that  rule.  Mott  v.  Consumer's  Ice  Co.,  73  N.  Y. 
543  ;  Fishkill  Savings  Inst.  v.  National  Bank,  80  N.  Y.  162, 
168;  Potulni  v.  Saunders,  37  Minn.  517,  35  N.  W.  Rep. 
379.  Where  the  business  with  which  the  agent  is  intrusted 
involves  a  duty  owed  by  the  master  to  the  public  or  third 
persons,  if  the  agent,  while  so  employed,  by  his  own  wrong- 
ful act,  occasions  a  violation  of  that  duty,  or  an  injury  to 
the  person  interested  in  its  faithful  performance  by  or  on 
behalf  of  the  master,  the  master  is  liable  for  the  breach  of 
it,  whether  it  be  founded  in  contract  or  be  a  common-law 


§  157.]     m'cord  V.  WESTERN  UNION  TEL.  CO.  309 

duty  growing  out  of  the  relations  of  the  parties.  1  Shear. 
&  R.  Neg.  (4th  ed.)  §§  149,  150,  154;  Tayl.  Corp.  (2d  ed.) 
§  145.  And  it  is  immaterial  in  such  case  that  the  wrongful 
act  of  the  servant  is  in  itself  wilful,  malicious,  or  fraudulent. 
Thus  a  carrier  of  passengers  is  bound  to  exercise  due  regard 
for  their  safety  and  welfare,  and  to  protect  them  from  insult. 
If  the  servants  employed  by  such  carrier  in  the  course  of 
such  employment  disregard  these  obligations,  and  maliciously 
and  wilfully,  and  even  in  disregard  of  the  express  instructions 
of  their  employers,  insult  and  maltreat  passengers  under  their 
care,  the  master  is  liable.  Stewart  v.  Brooklyn  &  Crosstown 
R.  R.  Co.,  90  N.  Y.  588,  593.  In  Booth  v.  Farmers',  &c. 
Bank,  50  N.  Y.  396,  an  officer  of  a  bank  wrongfully  dis- 
charged a  judgment  which  had  been  recovered  by  the  bank, 
after  it  had  been  assigned  to  the  plaintiff.  It  was  there 
claimed  that  the  authority  of  the  officer  and  the  bank  itself 
to  satisfy  the  judgment  had  ceased,  and  that  hence  the  bank 
was  not  bound  by  what  its  president  did  after  such  assign- 
ment. But  the  court  held  otherwise,  evidently  upon  the 
same  general  principle,  as  respects  the  duty  of  the  bank  to 
the  assignee,  and  laid  down  the  general  proposition,  equally 
applicable  to  the  agent  of  the  defendant  in  the  case  at  bar, 
that  the  particular  act  of  the  agent  or  officer  was  wrongful 
and  in  violation  of  his  duty,  yet  it  was  within  the  general 
scope  of  his  powers,  and  as  to  innocent  third  parties  dealing 
with  the  bank,  who  had  sustained  damages  occasioned  by 
such  act,  the  corporation  was  responsible. 

And  the  liability  of  the  corporation  in  such  cases  is  not 
affected  by  t,hfl  fan*  that  t.hp  pnrtirnlar  not  which  the  agent 
has  assumed  to  do  is  one  which  the  corporation  itself  could  not 
rightfully  or  lawfully  do.  In  Farmers',  &c.  Bank  v.  Butchers' 
and  Drovers'  Bank,  16  N.  Y.  125,  133  (69  Am.  Dec.  678), 
a  case  frequently  cited  with  approval,  the  teller  of  a  bank 
was,  with  its  consent,  in  the  habit  of  ceitifying  checks  for 
customers,  but  he  had  no  authority  to  certify  in  the  absence 
of  funds,  which  would  be  a  false  representation  ;  yet  it  was 
held,  where  he  had  duly  certified  a  check  though  the  drawer 


310  TORTS  BY  AGENT.  [CH.  XIII. 

had  no  funds,  that  the  bank  was  liable,  on  the  ground  that, 
as  between  the  bank  which  had  employed  the  teller,  and 
held  him  out  as  authorized  to  certify  checks  (which  involved 
a  representation  by  one  whose  duty  it  was  to  ascertain  and 
know  the  facts),  and  an  innocent  purchaser  of  the  check  so 
certified,  the  bank  ought  to  be  the  loser.  Gould  v.  Town  of 
Sterling,  23  N.  Y.  439,  463 ;  Bank  of  New  York  v.  Bank 
of  Ohio,  29  N.  Y.  619,  632.  See  also  Titus  v.  President, 
&c,  Turnpike  Road,  61  N.  Y.  237;  New  York  and  N  H. 
R.  R.  Co.  v.  Schuyler,  34  N.  Y.  30,  64 ;  Lane  v.  Cotton,  12 
Mod.  472,  490.  The  defendant  Relented  its  agent,  planed  him 
in  charge  of  its  business  at  the  station  in  question,  and  author- 
ized him  to  send  messages  over  its  line.  Persons  receiving 
despatches  in  the  usual  course  of  business,  when  there  is 
nothing  to  excite  suspicion,  are  entitled  to  rely  upon  the 
presumption  that  the  agents  intrusted  with  the  performance 
of  the  business  of  the  company  have  faithfully  and  honestly 
discharged  the  duty  owed  by  it  to  its  patrons,  and  that  they 
would  not  knowingly  send  a  false  or  forged  message ;  and 
it  would  ordinarily  be  an  unreasonable  and  impracticable 
rule  to  require  the  receiver  of  a  despatch  to  investigate  the 
question  of  the  integrity  and  fidelity  of  the  defendant's 
agents  acting  in  the  performance  of  their  duties,  before 
acting.  "Whether  the  agent  is  unfaithful  to  his  trust,  or 
violates  his  duty  to,  or  disobeys  the  instructions  of,  the 
company,  its  patrons  may  have  no  means  of  knowing.  If 
the  pnrpnrntinn  fflj)s  in  the  performance  of  its  duty  through 
the  neglect  or  fraud  of  the  agent  whom  it  has  delegated 
to  perform  itT  the  master  is  responsible.  It  was  the  busi- 
ness of  the  agent  to  send  despatches  of  a  similar  character, 
and  such  acts  were  within  the  scope  of  his  employment, 
and  the  plaintiff  could  not  know  the  circumstances  that 
made  the  particular  act  wrongful  and  unauthorized.  As 
to  him,  therefore,  it  must  be  deemed  the  act  of  the  cor- 
poration. Bank  of  Cal.  v.  Western  Union  Tel.  Co.,  52  Cal. 
280  ;  Booth  v.  Farmers',  &c,  Bank,  supra. 

4.   The  defendant  also  insists  that  it  is  not  liable  for  the 


§  159.]  COMMONWEALTH  V.  KELLEY.  311 

money  forwarded  in  response  to  the  despatch,  because  it  was 
embezzled  by  Swanson  as  agent  of  the  express  company.  It 
is  unnecessary  to  consider  whether  an  action  for  the  amount 
might  not  have  been  maintained  against  that  company  as  well 
as  against  the  defendant  or  the  agent  himself.  The  position 
of  trust  in  which  the  defendant  had  placed  him  enabled  him, 
through  the  use  of  the  company's  wires  in  the  ordinary 
course  of  his  agency,  to  induce  the  plaintiff  to  place  the 
money  within  his  reach.  It  is  immaterial  what  avenue  was 
chosen.  Had  it  been  forwarded,  and  intercepted  by  a  con- 
federate, the  result  would  have  been  the  same.  The  proxi 
mate  cause  of  plaintiff's  loss  was  the  sending  of  the  forged 
despatch.  The  actual  conversion  of  the  money  was  only  the 
culmination  of  a  successful  fraud.  The  acts  of  Swanson 
as  agent  of  the  defendant  and  of  the  express  company 
were  the  execution  of  the  different  parts  of  one  entire  plan 
or  scheme.  That  his  subsequent  acts  aided  and  concurred 
in  producing  the  result  aimed  at,  did  not  make  the  forged 
despatch  any  the  less  operative  as  the  procuring  or  proxi- 
mate cause  of  plaintiff's  loss.  Milwaukee  &  St.  Paul  Ry. 
Co.  v.  Kellogg,  94  U.  S.  469,  475 ;  Martin  v.  North  Star 
Iron  Works,  31  Minn.  407,  410  (18  N.  W.  Rep.  109). 
Order  affirmed,  and  case  remanded  for  further  proceedings. 


6.   Liability  for  crimes  of  agent. 

§159.]         COMMONWEALTH  v.   KELLEY. 

140  Massachusetts,  441.  — 1886. 

Indictment  and  conviction  for  violation  of  the  statute 
which  prohibited  licensed  liquor-sellers  from  maintaining  a 
screen  or  curtain  to  cut  off  a  public  view  of  the  premises. 
Defendant  had  instructed  his  clerk  not  to  draw  the  curtains, 
but  the  clerk  did  so  in  violation  of  his  instructions.  The 
court  ruled  this  was  no  defence. 


312  TORTS   BY  AGENT.  [CH.  XIII. 

W.  Allen,  J.  We  think  that  the  ruling  and  instructions 
were  correct.  The  provision  of  the  statute  relates  to  the  use 
and  management  of  licensed  premises,  and  its  expi*ess  intent  is 
to  secure  an  unobstructed  view  of  their  interior  at  all  times 
by  persons  outside.  It  is  addressed  to  the  licensee  only ;  no 
other  person  can  violate  it.  It  forbids  him  to  do,  or  to  per- 
mit to  be  done,  the  prohibited  act,  and,  by  fair  intendment, 
includes  acts  done  in  the  use  of  the  premises  in  carrying  on 
the  business  licensed,  whether  they  are  done  by  the  licensee 
in  person,  or  by  his  agent  left  by  him  in  charge  and  man- 
agement of  the  business.  Commonwealth  v.  Emmons,  98 
Mass.  6;  Commonwealth  v.  Uhrig,  138  Mass.  492:  Rex  v. 
Medley,  6  Car.  &  P.  292  ;  Bex  v.  Dixon,  3  M.  &  S.  11. 

Exceptions  overruled. 

Commonwealth  v.  Wachendorf,  141  Mass.  270  (1886)  : 
Indictment  and  conviction  for  selling  liquor  during  prohibited 
hours.  The  court  ruled  that  it  was  no  defence  that  defendant 
had  instructed  his  bar-keeper  not  to  sell  during  those  hours, 
and  that  the  bar-keeper  had  disobeyed  instructions.  Morton, 
C.  J.  (after  distinguishing  Commonwealth  v.  Kettey,  supra). 
M  Section  1,  upon  which  the  complaint  in  the  case  at  bar  is 
based,  subjects  to  punishment  an}*  person  who  sells  liquor  un- 
lawfully. It  is  to  be  presumed  that  the  Legislature  intended 
to  use  the  language  in  its  natural  sense,  and  with  the  meaning 
given  to  equivalent  language  by  the  court  in  Commonwealth 
v.  Nichols,  10  Met.  259.  It  is  not  a  necessar}*  or  reasonable 
construction  to  hold  that  it  subjects  to  punishment  a  person 
who  does  not  sell,  because  a  servant  in  his  employment,  in 
opposition  to  his  will  and  against  his  orders,  makes  an  unlaw- 
ful sale.  We  are  therefore  of  opinion  that  the  instruction  re- 
quested by  the  defendant  should  have  been  given.  Of  course, 
it  would  be  for  the  jury,  under  the  instruction,  to  determine 
whether  the  defendant  did,  in  good  faith,  give  instructions, 
intended  to  be  obeyed  and  enforced,  that  no  sale  should  be 
made  after  eleven  o'clock.  If  he  did,  and  a  sale  was  made 
In  violation  of  them,  without  his  knowledge,  he  cannot  be 
held  guilty  of  the  offence  charged  in  the  complaint." 


§  159.]  COMMONWEALTH  V.   KELLEY.  313 

State  v.  McCance,  110  Missouri,  398  (1892),  holds  that 
proof  of  sale  by  agent  makes  a  primd  facie  case  against  the 
principal,  but  that  the  latter  may  rebut  the  presumption  by 
proof  that  the  sale  was  forbidden  by  him.  "As  a  general 
rule  of  law,  the  principal  cannot  be  held  criminally  liable  for  the 
acts  of  his  agent  committed  without  his  knowledge  or  con- 
sent. But  there  are  statutes,  which  are  in  the  nature  of  police 
regulations,  which  impose  criminal  penalties,  irrespective  of 
any  intent  to  violate  them.  A  number  of  these  are  collated 
b}'  Chief  Justice  Cooley  in  People  v.  Roby,  52  Mich.  577." 

Noecker  v.  People,  91  Illinois,  494  (1879)  :  Indictment 
and  conviction  for  selling  liquor  without  a  license.  Mr. 
Justice  Sheldon.  .  .  .  "Some  of  the  sales  testified  to  were 
made  by  clerks  of  the  defendant.  The  court  rejected  testi- 
mony offered  by  the  defendant,  as  to  what  instructions  he 
gave  his  clerks  in  relation  to  the  sale  of  intoxicating  liquors. 
This  is  assigned  for  error.  We  think  the  testimony  was 
properly  excluded.  The  language  of  the  statute  is,  who- 
ever, by  himself,  clerk,  or  servant,  shall  sell,  etc.,  shall  be 
liable.  The  testimony  was  uncontradicted  that  the  defendant 
kept  intoxicating  liquors  for  sale,  and  the  defendant  would 
be  responsible  for  the  acts  of  selling  by  his  clerks,  no  matter 
what  might  have  been  his  instructions  to  them.  .  .  ." 

Morse  v.  State,  6  Conn.  9  (1825) :  Information  and  con- 
viction for  violation  of  a  statute  prohibiting  the  giving  of 
credit  to  college  students.  Hosmer,  C.  J.  .  .  .  u  It  is  fairly 
to  be  inferred  that  no  credit  was  given  to  Van  Zandt  by 
the  defendant,  but  by  Northam,  his  bar-keeper,  only,  with- 
out the  knowledge  or  consent  of  Morse,  and  against  his 
express  directions.  In  the  performance  of  this  act  Northam 
was  not  the  defendant's  agent.  He  was  not  authorized 
to  give  the  credit,  either  expressly  or  in  the  usual  course 
of  his  business,  but  was  prohibited  from  doing  it.  Not- 
withstanding this,  which  the  court  below  impliedly  admitted, 
the  jury  were  charged  that  if  the   defendant  subsequently 


314  TORTS  BY  AGENT.  [CH.  XIIL 

assented  to  the  acts  of  Northam,  he  ratified  them,  and  made 
them  his  own.  This  was  an  unquestionable  error.  In 
the  law  of  contracts  a  posterior  recognition,  in  many  cases, 
is  equivalent  to  a  precedent  command ;  but  it  is  not  so  in 
respect  of  crimes.  The  defendant  is  responsible  for  his  own 
acts,  and  for  the  acts  of  others  done  by  his  express  or  implied 
command  ;  but  to  crimes  the  maxim  omnis  ratihabitio  retro- 
trahitur  ex  mandato  equiparatur,  is  inapplicable." 


7.     Liability  for  torts  of  sub-agents. 

§  160.]       HALUPTZOK  v.   GREAT  NORTHERN 
RAILWAY  COMPANY. 
55  Minnesota,  446.  —  1893. 

Action  for  damages  for  personal  injuries.  Judgment  for 
plaintiff.  Defendant  appeals  from  an  order  denying  its 
motion  for  a  new  trial. 

Mitchell,  J.  The  plaintiff  brought  this  action  to  recover 
for  personal  injuries  to  his  infant  child,  caused  by  the  negli- 
gence of  the  alleged  servant  of  the  defendant.  1878  G.  S. 
ch.  66,  §  34. 

The  injuries  were  inflicted  by  one  O'Connell,  and  the  only 
question  presented  by  this  appeal  is  whether  O'Connell  was 
defendant's  servant.  The  evidence,  in  which  there  is  no 
material  conflict,  is  substantially  as  follows :  The  defendant 
maintained  a  public  depot  and  freight  and  passenger  station 
at  the  village  of  Waverly.  The  premises  were  owned  and 
controlled  by  the  defendant,  but  the  Great  Northern  Express 
Company  and  the  Western  Union  Telegraph  Company  had 
their  offices  in  the  same  building,  one  Westinghouse  being 
the  common  agent  for  all  three  companies.  Westinghouse 
had  exclusive  charge  of  all  the  defendant's  business  at  the 
station.  He  testified  that  he  had  no  authority  to  employ  any 
assistants,  such  authority  being  exclusively  vested  in  the 


§  160.]        HALUPTZOK  V.   GREAT  NORTHERN  RY.        315 

general  officers  of  the  company ;  and,  as  respects  express 
authority,  this  testimony  is  not  contradicted.  For  a  year  or 
more  before  the  injury  complained  of,  Westinghouse  had 
permitted  a  j'oung  man  named  Foutch  to  use  and  practise  on 
the  instruments  in  the  office,  for  the  purpose  of  learning  teleg- 
raphy ;  and  during  that  time  Foutch  had  been  in  the  habit, 
as  occasion  required,  of  assisting  Westinghouse  in  the  per- 
formance of  his  railway  duties,  such  as  selling  tickets,  han- 
dling freight,  putting  out  switch  lights,  etc.  He  had  no 
contract  with  the  railway  company,  and  received  no  wages ; 
the  work  he  did  evidently  being  in  return  for  the  privilege  of 
the  office,  and  the  use  of  the  instruments,  in  learning  teleg- 
raph}'. There  is  no  evidence  that  the  general  officers  of  the 
defendant  knew  of  or  assented  to  Foutch's  performing  this 
work,  except  the  length  of  time  it  had  continued,  and  the 
absence  of  any  testimony  that  they  ever  objected.  About 
ten  days  before  the  accident,  Westinghouse,  with  the  per- 
mission of  the  Western  Union  Telegraph  Company,  gave 
O'Connell  the  privilege  of  the  office,  and  the  use  of  the 
instruments,  for  the  purpose  of  learning  telegraphy,  evidently 
under  substantially  the  same  arrangement  by  which  he  had 
previously  given  Foutch  similar  privileges.  O'Connell  had 
no  contract  with  the  defendant,  and  received  no  wages.  The 
time  between  his  coming  into  the  office  and  the  date  of  the 
accident  was  so  brief  that  the  evidence  is  ver}-  meagre  as  to 
his  doing  railroad  work  about  the  station  during  that  time, 
but  there  was  evidence  tending  to  show  that  he  had  on 
several  occasions,  with  the  knowledge  and  consent  of  West- 
inghouse, handled  freight.  On  the  day  in  question,  he  went 
to  work,  with  a  truck,  to  move  some  goods  from  the  station 
platform  into  a  freight  room.  Foutch  assisted  him  by  piling 
up  the  goods  in  the  room  while  O'Connell  carried  them  in. 
While  thus  handling  the  truck,  O'Connell  ran  it  against 
plaintiff's  child,  who  was  walking  around  the  depot,  and 
inflicted  the  injury  complained  of.  There  is  no  evidence  that 
at  or  prior  to  the  accident  the  general  officers  of  the  defend- 
ant knew  that  O'Connell  was  employed  about  the  station. 


316  TOKTS   BY  AGENT.  [CH.  XIII. 

But  both  Foutch  and  O'Connell,  after  the  accident,  continued 
at  the  depot,  practising  telegraphy,  and  assisting  Westing- 
house,  as  before,  in  selling  tickets,  handling  freight,  etc.,  and 
were  still  doing  so  at  the  date  of  the  trial,  which  was  five 
months  after  the  accident,  and  over  four  months  after  the 
commencement  of  this  action ;  and,  while  there  is  no  direct 
evidence  that  this  was  with  the  knowledge  of  the  general 
officers  of  the  defendant,  there  is  no  evidence  that  they  did 
not  know  of  it,  and  none  that  they  ever  objected  to  it.  Such 
we  believe  to  be  a  fair  and  full  statement  of  the  effect  of  the 
evidence. 

Under  the  doctrine  of  respondeat  superior,  a  master,  how- 
ever careful  in  the  selection  of  his  servants,  is  responsible  to 
strangers  for  their  negligence  committed  in  the  course  of 
their  employment.  The  doctrine  is  at  best  somewhat  severe, 
and,  if  a  man  is  to  be  held  liable  for  the  acts  of  his  servants, 
he  certainly  should  have  the  exclusive  right  to  determine  who 
they  shall  be.  Hence,  we  think,  in  every  well-considered 
case  where  a  person  has  been  held  liable,  under  the  doctrine 
referred  to,  for  the  negligence  of  another,  that  other  was 
engaged  in  his  service  either  by  the  defendant  personally,  or 
by  others  by  his  authority,  express  or  implied.  There  is  a 
class  of  cases,  of  which  Bush  v.  Steinman,  1  Bos.  &  P.  404 
(often  doubted  and  criticised),  is  an  example,  which  seems  to 
hold  that  a  person  may  be  liable  for  the  negligence  of  an- 
other, not  his  servant.  But  these  were  generally  cases  where 
the  injury  was  done  by  a  contractor,  sub-contractor,  or  their 
servants,  upon  the  real  estate  of  the  defendant,  of  which  he 
was  in  possession  and  control ;  and  they  seem  to  proceed 
upon  the  theory  that,  where  a  man  is  in  possession  of  fixed 
property,  he  must  take  care  that  it  is  so  used  and  managed 
by  those  whom  he  brings  upon  the  premises  as  not  to  be 
dangerous  to  others.  In  that  view,  he  is  held  liable,  not  for 
the  negligence  of  another,  but  for  his  own  personal  negligence 
in  not  preventing  or  abating  a  nuisance  on  his  own  premises. 
See  Laugher  v.  Pointer,  5  Barn.  &  C.  547.  There  will  also 
be  found  in  some  text-books  statements  to  the  effect  that 


§  160.]    HALUPTZOK  V.   GREAT  NORTHERN  RY.    317 

where  a  servant  is  employed  to  do  a  particular  piece  of  work, 
and  he  employs  another  person  to  assist  him,  the  master  is 
liable  for  the  acts  of  the  person  so  employed,  as  much  as  for 
the  acts  of  the  servant  himself.  Thus  generally  stated,  with- 
out qualification,  the  proposition  is  misleading,  as  well  as 
inaccurate. 

The  cases  most  generally  cited  in  support  of  it  are  Booth 
v.  Mister,  7  Car.  &  P.  66,  and  Althorfv.  Wolfe,  22  N.  Y. 
355.  In  Booth  v.  Mister  the  defendant's  servant,  whose  duty 
it  was  to  drive  his  master's  cart,  was  riding  in  the  cart,  but 
had  given  the  reins  to  another  person,  who  was  riding  with 
him,  but  was  not  in  the  master's  employment,  and  through 
the  negligent  management  of  this  other  person  the  plaintiff 
was  injured.  The  defendant  was  held  liable,  not  for  the 
mere  negligence  of  such  other  person,  but  for  the  negligence 
of  the  servant  himself,  who  was  riding  in  the  cart,  and  either 
actively  or  passivel}*  controlling  and  directing  the  driving,  as 
much  as  if  he  had  held  the  reins  in  his  own  hands. 

In  Althorf  v.  Wolfe,  a  servant,  having  been  directed  to 
remove  snow  from  the  roof  of  his  master's  house,  secured  the 
services  of  a  friend  to  assist  him ;  and  while  the  two  were 
engaged  together  in  throwing  the  snow  from  the  roof  into  the 
street,  a  passer-by  was  struck  and  killed.  It  was  held  that  it 
was  immaterial  which  of  the  two  threw  the  ice  or  snow  which 
caused  the  injury  ;  that  in  either  case  the  master  was  liable. 
The  case  is  a  very  unsatisfactory  one,  and  it  is  very  difficult 
to  ascertain  the  precise  ground  upon  which  it  was  decided. 
Wright,  J. ,  seems  to  put  it  on  one  or  all  of  three  grounds : 
(1)  That  the  servant  had  implied  authority  to  procure  assist- 
ance ;  (2)  that  defendant's  family,  who  were  left  in  charge  of 
the  house,  ratified  the  act  of  the  servant ;  and  (3)  upon  the 
same  ground  upon  which  Booth  v.  Mister  was  decided.  On 
the  other  hand,  Denio,  J.,  seems  to  place  his  opinion  upon 
the  ground  upon  which  we  have  suggested  that  Bush  v. 
Steinman  proceeds.  It  is  also  to  be  observed  that  two  of  the 
justices  dissented.  But  neither  of  these  cases,  if  rightly  under- 
stood, is  in  conflict  with  the  proposition  with  which  we  started 


318  TORTS   BY  AGENT.  [CH.  XIII. 

out,  —  that  a  master,  as  such,  can  be  held  liable  for  the  negli- 
gence only  of  those  who  are  employed  in  his  work  by  his 
authority ;  and  hence,  if  a  servant  who  is  employed  to  per- 
form a  certain  work  procures  another  person  to  assist  him, 
the  master  is  liable  for  the  sole  negligence  of  the  latter,  only 
when  the  servant  had  authority  to  employ  such  assistant. 
Such  authority  may,  however,  be  implied  as  well  as  express, 
and  subsequent  ratification  is  equivalent  to  original  authority  ; 
and,  where  the  servant  has  authority  to  employ  assistants, 
such  assistants,  of  course,  become  the  immediate  servants  of 
the  master,  the  same  as  if  employed  by  him  personally.  Such 
authority  may  be  implied  from  the  nature  of  the  work  to  be 
performed,  and  also  from  the  general  course  of  conducting  the 
business  of  the  master  by  the  servant  for  so  long  a  time  that 
knowledge  and  consent  on  part  of  the  master  may  be  inferred. 
It  is  not  necessary  that  a  formal  or  express  employment  on 
behalf  of  the  master  should  exist,  or  that  compensation  should 
be  paid  by  or  expected  from  him.  It  is  enough  to  render  the 
master  liable  if  the  person  causing  the  injuiy  was  in  fact 
rendering  service  for  him  by  his  consent,  express  or  implied. 

Under  this  view  of  the  law,  the  evidence  made  a  case  for 
the  jur}r  to  determine  whether  Westinghouse  had  implied 
authority  from  the  defendant  to  employ  O'Connell  as  an 
assistant,  or,  to  state  the  question  differently,  whether  O'Con- 
nell was  rendering  these  services  for  the  defendant  by  its 
consent. 

If  the  evidence  were  limited  to  the  employment  of  O'Connell 
alone,  and  to  what  occurred  during  the  ten  days  preceding 
the  accident,  it  would  probably  be  insufficient  to  support  a 
verdict  in  favor  of  the  plaintiff.  But  it  is  an  undisputed  fact 
that  Westinghouse  had  for  over  a  year  before  this  been 
employing  Foutch  as  an  assistant  under  a  similar  arrange- 
ment, without,  so  far  as  appears,  any  objection  on  part  of  the 
defendant,  although  the  length  of  time  was  such  that  its 
knowledge  of  the  fact  may  be  fairly  inferred.  It  is  true  that 
implied  authority  to  employ  Foutch  as  assistant  would  not 
necessarily  include  authority  to  emplo}"  O'Connell ;   but  the 


§  161.]  KEENAN  V.   SOUTHWORTH.  319 

fact  of  Foutch's  long  continued  employment  has  an  important 
bearing  upon  the  question  of  Westinghouse's  implied  authority, 
as  indicated  by  the  manner  of  conducting  the  business  ;  and, 
as  bearing  upon  this  same  question  of  implied  authority,  the 
fact  is  significant  that  after  the  accident  both  Foutch  and 
O'Connell  continued,  without  objection,  to  perform  these  ser- 
vices for  defendant,  as  assistants  to  Westinghouse,  up  to  the 
date  of  the  trial.  Additional  force  is  added  to  all  this,  when 
considered  in  connection  with  the  nature  of  the  duties  of  a 
station  agent  at  a  place  like  this,  which  are  of  such  multifarious 
character  as  to  render  the  employment  of  an  occasional  assist- 
ant not  only  convenient,  but  almost  necessary.  The  facts 
that  the  consideration  for  the  services  of  these  assistants 
moved  from  Westinghouse  rather  than  defendant,  and  that 
their  aid  was  for  the  accommodation  or  convenience  of  West- 
inghouse, are  not  controlling. 

There  is  nothing  in  the  point  that  defendant  is  not  liable 
because  the  freight  which  O'Connell  was  moving  had  been 
delivered  to  the  consignee,  who  had  promised  to  take  care  of 
it  where  it  lay,  on  the  station  platform. 

O'Connell's  act  was  in  the  line  of  his  employment,  and  was 
being  done  in  furtherance  of  defendant's  business.  The 
liability  of  the  defendant  to  third  parties  cannot  be  made  to 
depend  upon  the  question  whether,  as  between  it  and  the 
owner  of  the  goods,  it  owed  the  latter  the  continued  duty  of 
taking  care  of  them.  Order  affirmed. 


8.   Liability  of  public  principals  and  charities  for  torts  of 

agents. 

§  161.]  KEENAN  v.  SOUTHWORTH. 

110  Massachusetts,  474.  — 1872. 

Tort  against  the  postmaster  of  East  Randolph,  to  recover 
damages  for  the  loss,  by  the  defendant's  negligence,  of  a 
letter  addressed  to  the  plaintiff.     At  the  trial  in  the  superior 


320  TORTS   BY  AGENT.  [CH.  XIII. 

court,  before  Pitman,  J.,  the  plaintiff  introduced  evidence, 
not  now  necessar}-  to  report,  that  the  letter  was  received  at 
the  post-office  at  East  Randolph,  and  was  lost  by  the  negli- 
gence or  wrongful  conduct  of  one  Bird,  who  was  the  post- 
master's clerk.  The  plaintiff  having  disclaimed  "  any  actual 
participancy  or  knowledge  of  the  acts  of  Bird  on  the  part 
of  the  defendant,"  the  judge  ruled  that  the  defendant  was 
not  liable  for  any  careless,  negligent,  or  wrongful  acts  of 
Bird ;  and,  by  consent  of  the  plaintiff,  he  directed  a  verdict 
for  the  defendant,  and  reported  the  case  for  the  considera- 
tion of  his  court.  If  the  ruling  was  wrong,  the  verdict  to 
be  set  aside,  and  the  case  to  stand  for  trial ;  otherwise,  judg- 
ment for  the  defendant  on  the  verdict. 

Gray,  J.  The  law  is  well  settled  in  England  and  America, 
that  the  postmaster-general,  the  deputy  postmasters,  and 
their  assistants  and  clerks,  appointed  and  sworn  as  required 
by  law,  are  public  officers,  each  of  whom  is  responsible  for 
his  own  negligence  only,  and  not  for  that  of  any  of  the 
others,  although  selected  b}'  him,  and  subject  to  his  orders. 
Lane  v.  Cotton,  1  Ld.  Raym.  646;  S.  C.  12  Mod.  472; 
Whitfield  v.  Le  Despencer,  Cowp.  754  ;  Dunlop  v.  Munroe, 
7  Cranch,  242 ;  Schroyer  v.  Lynch,  8  Watts,  453  ;  Bishop 
v.  Williamson,  2  Fairf.  495 ;  Hutchins  v.  Brackett,  2  Fos- 
ter, 252. 

The  ruling  at  the  trial  was  therefore  right ;  and  the  plain- 
tiff, having  consented  to  a  verdict  for  the  defendant,  reserv- 
ing only  the  question  of  the  correctness  of  that  ruling, 
cannot  now  raise  the  question  whether  there  was  sufficient 
evidence  of  the  defendant's  own  negligence  to  be  submitted 
to  the  jury.  Judgment  on  the  verdict. 


§  101.  J        FIEE  INSURANCE  PATROL  V.   B6T13.  Si'i 


§  161.]    FIRE  INSURANCE  PATROL  v.  BOYD. 
120  Pennsylvania  State,  624.  —  1888. 

Action  for  wrongfully  causing  the  death  of  plaintiffs'  in- 
testate.   Judgment  for  plaintiffs. 

Defendant's  servants  negligent^  pitched  heavy  bundles 
out  of  a  fourth-story  window.  Plaintiffs'  intestate  was  struck 
by  one  of  these  bundles  and  so  seriously  injured  that  he  sul>- 
sequently  died  of  his  injuries.  Defendant  corporation  has  no 
capital  stock,  declares  no  dividends,  and  is  equipped  and 
maintained  by  voluntary  contributions  or  subscriptions  made 
mainly  by  insurance  companies.  Its  services  are  given  how- 
ever to  the  saving  of  life  and  property  threatened  by  fire, 
whether  the  property  endangered  is  insured  or  not. 

Mr.  Justice  Paxson  (after  discussing  the  question  whether 
defendant  corporation  is  a  public  charity).  Our  conclusion 
is  that  the  Fire  Insurance  Patrol  of  Philadelphia  is  a  public 
qharitable  institution ;  that  in  the  performance  of  its  duties 
it  is  acting  in  aid  and  in  ease  of  the  municipal  government 
in  the  preservation  of  life  and  property  at  fires.  It  re- 
mains to  inquire  whether  the  doctrine  of  respondeat  superior 
applies  to  it  Upon  this  point  we  are  free  from  doubt. 
It  has  been  held  in  this  State  that  the  duty  of  extinguish- 
ing fires  and  saving  property  therefrom  is  a  public  duty, 
and  the  agent  to  whom  such  authority  is  delegated  is  a 
public  agent  and  not  liable  for  the  negligence  of  its  em- 
ployes. This  doctrine  was  affirmed  b3*  this  court  in  Knight 
v.  City  of  Philadelphia,  15  W.  N.  C.  307,  where  it  was 
said :  "  We  think  the  court  did  not  commit  any  error 
in  entering  judgment  for  the  defendant  upon  the  demurrer. 
The  members  of  the  fire  department  are  not  such  servants 
of  the  municipal  corporation  as  to  make  it  liable  for  their 
acts  or  negligence.  Their  duties  are  of  a  public  character, 
and  for  a  high  order  of  public  benefit.  The  fact  that  this 
not  of  assembl}-  did  not  make  it  obligatory  on  the  city  to 
organize  a  fire  department,  does  not  change   the  legal  lia- 

21 


322  TOKTS   BY  AGENT.  [CH.  XIII. 

Mlit}'  of  the  municipality  for  the  conduct  of  the  members  of 
the  organization.  The  same  reason  which  exempts  the  city 
from  liability  for  the  acts  of  its  policemen,  applies  with 
equal  force  to  the  acts  of  the  firemen."  And  it  would 
seem  from  this  and  other  cases  to  make  no  difference  as 
respects  the  legal  liabilit}*,  whether  the  organization  perform- 
ing such  public  service  is  a  volunteer  or  not.  Jewett  v.  New 
Haven,  38  Conn.  368 ;  Russell  v.  Men  of  Devon,  2  T.  R. 
667 ;  Feoffees  of  Heriot's  Hospital  v.  Moss,  12  C.  &  F. 
506;  Riddle  v.  Proprietors,  7  Mass.  169;  McDonald  v. 
Hospital,  120  Mass.  432;  Boyd  v.  Insurance  Patrol,  113 
Pa.  269.  But  I  will  not  pursue  this  subject  further,  as  there 
is  another  and  higher  ground  upon  which  our  decision  may 
be  placed. 

The  Insurance  Patrol  is  a  public  charity  :  it  has  no  property 
or  funds  which  b«yf  nnt  hoon  9— toihBJbed  for  the  purposes  of 
charity,  and  it  would  be  against  all  law  and  all  equity  to  take 
those  ^gj  funds,  so  contributed  for  a  special  charitable,  pur- 
pose, to  compensate  injuries  inflicted  or  occasioned^bxlhe 
negligence  of  the  agents  or  servants  of  the  patrol.  It  would 
be  rarryipfi  the,  doctrine  of  respondeat  superior  to  an  un- 
Teflprmnhle  nnfl  dangerous  lepgt.h,,^  That  doctrine  is  at 
best  —  as  I  once  before  observed  —  a  hard  rule.  I  trust 
and  believe  it  will  never  be  extended  to  the  sweeping  away 
of  public  charities  ;  to  the  misapplication  of  funds,  especially 
contributed  for  a  public  charitable  purpose,  to  objects  not 
contemplated  by  the  donors.  I  think  it  ma}r  be  safely 
assumed  that  private  trustees,  having  the  control  of  rnone}' 
contributed  for  a  specific  charity,  could  not,  in  case  of  a  tort 
committed  by  any  one  of  their  members,  apply  the  funds  in 
their  hands  to  the  paj'ment  of  a  judgment  recovered  therefor. 
A  public  charity,  whether  incorporated  or  not,  is  but  a  trustee, 
and  is  bound  to  apply  its  funds  in  furtherance  of  the  charit}', 
and  not  otherwise.  This  doctrine  is  hoary  with  antiquity, 
and  prevails  alike  in  this  countr}'  and  in  England,  where  it 
originated  as  early  as  the  reign  of  Edward  V.,  and  it  was 
announced  in  the  Year  Book  of  that  period.     In  the  Feoffees 


§  161.]        FIRE  INSURANCE  PATROL  V.  BOYD.  323 

of  Heriot's  Hospital  v.  Boss,  12  C.  &  F.  506,  a  person 
eligible  for  admission  to  the  hospital  brought  an  action  for 
damages  against  the  trustees  for  the  wrongful  refusal  on  their 
part  to  admit  him.  The  case  was  appealed  to  the  House  of 
Lords,  when  it  was  unanimously  held  that  it  could  not  be 
maintained.  Lord  Cottenham  said:  "It  is  obvious  that  it 
would  be  a  direct  violation,  in  all  cases,  of  the  purpose  of  a 
trust  if  this  could  be  done  ;  for  there  is  not  any  person  who 
ever  created  a  trust  that  provided  for  payment  out  of  it  of 
damages  to  be  recovered  from  those  who  had  the  manage- 
ment of  the  fund.  No  such  provision  has  been  made  here. 
There  is  a  trust,  and  there  are  persons  intended  to  manage  it 
for  the  benefit  of  those  who  are  to  be  the  objects  of  the  charity. 
To  give  damages  out  of  a  trust  fund  would  not  be  to  apply  it 
to  those  objects  which  the  author  of  the  fund  had  in  view,  but 
would  be  to  divert  it  to  a  completely  different  purpose."  Lord 
Brougham  said:  "The  charge  is  that  the  governors  of  the 
hospital  have  illegally  and  improperly  done  the  act  in  ques- 
tion, and,  therefore,  because  the  trustees  have  violated  the 
statute,  therefore  —  what?  Not  that  they  shall  themselves 
pay  the  damages,  but  that  the  trust  fund  which  they  adminis- 
ter shall  be  made  answerable  for  their  misconduct.  The  find- 
ing on  this  point  is  wrong,  and  the  decree  of  the  court  below 
must  be  reversed."  Lord  Campbell :  "  It  seems  to  have  been 
thought  that  if  charity  trustees  have  been  guilty  of  a  breach 
of  trust,  the  persons  damnified  thereby  have  a  right  to  be 
indemnified  out  of  the  trust  funds.  That  is  contrary  to  all 
reason,  justice,  and  common  sense.  Such  a  perversion  of 
the  intention  of  the  donor  would  lead  to  most  inconvenient 
consequences.  The  trustees  would  in  that  case  be  indemni- 
fied against  the  consequences  of  their  own  misconduct,  and 
the  real  object  of  the  charity  would  be  defeated.  Damages 
are  to  be  paid  from  the  pocket  of  the  wrong-doer,  not  from  a 
trust  fund.  A  doctrine  so  strange,  as  the  court  below  has 
laid  down  in  the  present  case,  ought  to  have  been  supported 
by  the  highest  authority.  There  is  not  any  authority,  not  a 
single  shred,  to  support  it.      No  foreign  or  constitutional 


324  TORTS  BY  AGENT.  [CH.  XHL 

writer  can  be  referred  to  for  such  a  purpose."  I  have  quoted 
at  some  length  from  the  opinions  of  these  great  jurists  because 
they  express  in  vigorous  and  clear  language  the  law  upon 
this  subject.  I  have  not  space  to  discuss  the  long  line  of 
case3  in  England  and  this  country  in  which  the  above  prin- 
ciple is  sustained.  It  is  sufficient  to  refer  to  a  few  of  them 
by  name.  Riddle  v.  Proprietors  of  the  Locks.  7  Mass.  187  ; 
McDonald  v.  Massachusetts  General  Hospital,  120  Mass. 
432;  Sherbourne  v.  Yuba  Co.,  21  Cal.  113;  Brown  v. 
Inhabitants  of  Vinalhaven,  65  Me.  402 ;  Mitchell  v.  City 
of  Rockland,  52  Me.  118  ;  City  of  Richmond  v.  Long,  17 
G  rattan,  375  ;  Ogg  v.  City  of  Lansing,  35  Iowa,  495  ;  Mur- 
taugh  v.  City  of  St.  Louis,  44  Mo.  479  ;  Patterson  v. 
Penn.  Reform  School,  92  Pa.  229  ;  Maxmillian  v.  Mayor, 
62  N.  Y.  160. 

I  am  glad  to  be  able  to  say  that  no  State  in  this  countr}7, 
or  in  the  world,  has  upheld  the  sacredness  of  trusts  with  a 
firmer  hand  than  the  State  of  Pennsylvania.  Not  onby  is  a 
trustee  for  a  public  or  private  use  not  permitted  to  misapply 
the  trust  funds  committed  to  his  care,  but  if  he  convert  them 
to  his  own  use  the  law  punishes  him  as  a  thief.  How  much 
better  than  a  thief  would  be  the  law  itself,  were  it  to  apply 
the  trust's  funds  contributed  for  a  charitable  object,  to  pay 
for  injuries  resulting  from  the  torts  or  negligence  of  the 
trustee  ?  The  latter  is  legally  responsible  for  his  own  wrong- 
ful acts.  I  understand  a  judgment  has  been  recovered  against 
the  individual  whose  negligence  occasioned  the  injury  in  this 
case.  If  we  apply  the  money  of  the  Insurance  Patrol  to  the 
payment  of  this  judgment,  or  of  the  same  cause  of  action, 
what  is  it  but  a  misapplication  of  the  trust  fund,  as  much  so  as 
if  the  trustees  had  used  it  in  payment  of  their  personal  liabili- 
ties? It  would  be  an  anomaly  to  send  a  trustee  to  the 
penitentiary  for  squandering  trust  funds  in  private  specula- 
tions, and  j'et  permit  him  to  do  practically  the  same  thing  by 
making  it  liable  for  his  torts.  If  the  principle  contended  for 
here  were  to  receive  any  countenance  at  the  hands  of  this 
court,  it  would  be  the  most  damaging  blow  at  the  integrity  of 


§  161.]        FIRE  INSURANCE  PATROL  V.  BOYD.  325 

trusts  which  has  been  delivered  in  Pennsylvania.    We  are 
not  prepared  to  take  this  step. 

We  are  not  unmindful  of  the  fact  that  it  was  contended  for 
the  defendant  in  error  that  the  case  of  Feoffees  of  HerioVs 
Hospital  v.  Ross  is  in  conflict  with  Mersey  Docks  v.  Gibbs, 
L.  R.  1  E.  &  I.  App.  Cas.  93,  and  Parnaby  v.  Lancaster 
Canal  Co.,  11  Ad.  &  E.  223.  I  am  unable  to  see  any  such 
conflict.  The  two  corporations  last  named  were  evidently 
trading  corporations,  and  in  no  sense  public  charities.  In 
regard  to  the  docks,  it  was  said  b}'  Blackburn,  J.,  at  page 
465:  "There  are  several  cases  relating  to  charities  which 
were  mentioned  at  your  lordship's  bar,  but  were  not  much 
pressed,  nor,  as  it  seems  to  us,  need  they  be  considered  now  ; 
for  whatever  may  be  the  law  as  to  the  exemption  of  property 
occupied  for  charitable  purposes,  it  is  clear  that  the  docks  in 
question  can  come  within  no  such  exemption." 

I  will  not  consume  time  by  discussing  the  case  of  Glavin 
v.  Rhode  Island  Hospital,  12  R.  I.  411,  which,  to  some 
extent,  sustains  the  opposite  view  of  this  question.  There, 
a  hospital  patient,  paying  eight  dollars  per  week  for  his  board 
and  medical  attendance,  was  allowed  to  recover  a  verdict 
against  the  hospital  for  unskilful  treatment,  and  it  was  held 
that  the  general  trust  funds  of  a  charitable  corporation  are 
liable  to  satisfy  a  judgment  in  tort  recovered  against  it  for 
the  negligence  of  its  officers  or  agents.  It  is  at  least  doubt- 
ful whether  under  its  facts  the  case  applies,  and  if  it  does, 
we  would  not  be  disposed  to  follow  it  in  the  face  of  the  over- 
whelming weight  of  authority  the  other  way,  and  of  the  sound 
reasoning  by  which  it  is  supported. 

The  foregoing  is  little  more  than  a  re-assertion  of  the  views 
of  this  court  as  heretofore  expressed  in  this  case  by  our 
Brother  Clark.  See  113  Pa.  269.  Many  of  the  authorities 
I  have  referred  to  are  there  cited  by  him.  We  are  now  more 
fully  informed  as  to  the  facts  of  the  case,  and  can  apply  to 
them  the  law  as  indicated  in  the  former  opinion. 

We  are  all  of  opinion  that  the  Insurance  Patrol  is  not  liable 
in  this  action,  and  the  judgment  against  it  is,  therefore, 

Reversed. 


CHAPTER  XIV. 

LIABILITY  OF  THIRD  PERSON  TO  PRINCIPAL. 

1.   Liability  upon  contracts. 

§165.]  HUNTINGTON  v.  KNOX. 

7  Cushing  (Mass.),  371.  — 1851. 
[Reported  herein  at  p.  253.] 


2.    Liability  in  quasi-contract  for  money  paid  under  mis- 
take, duress,  or  fraud. 

§  167.]  STEVENSON  v.  MORTIMER. 

Cowper's  Reports  (K.  B.),  805.—  1778. 

Action  for  money  had  and  received.  Non-suit  ordered. 
Rule  to  show  cause  why  non-suit  should  not  be  set  aside. 

Plaintiffs  were  owners  of  a  boat.  Defendant  was  a  cus- 
tom-house officer.  Plaintiffs'  agent,  the  master  of  the  boat, 
had  paid  to  defendant  certain  fees  which  were  alleged  by 
plaintiffs  to  be  unauthorized  and  exorbitant.  The  trial  court 
ruled  that  the  duty  to  pay  the  fees  (if  any)  was  imposed  by 
statute  upon  the  master,  and  that  the  action  could  not  be 
maintained  in  the  name  of  the  plaintiffs. 

Lord  Mansfield.  The  ground  of  the  non-suit  at  the 
trial  was,  that  this  action  could  not  be  well  maintained  by 
the  plaintiffs,  who  are  the  owners  of  the  vessel  in  question  ; 
but  it  ought  to  have  been  brought  by  the  master,  who  actu- 
ally paid  the  money.  That  ground,  therefore,  makes  now  the 
only  question  before  us ;  as  to  which,  there  is  not  a  particle 
of  doubt.     Qui  facit  per  alium,  facit  per  se.     Where  a  man 


§  167.  J  STEVENSON  V.  MORTIMER.  327 

pays  monejT  by  his  agent,  which  ought  not  to  have  been  paid, 
either  the  agent,  or  the  principal,  may  bring  an  action  to 
recover  it  back.  The  agent  may,  from  the  authority  of  the 
principal,  and  the  principal  may,  as  proving  it  to  have  been 
paid  by  his  agent.  If  monej*  is  paid  to  a  known  agent,  and 
an  action  brought  against  him  for  it,  it  is  an  answer  to  such 
action,  that  he  has  paid  it  over  to  the  principal.  Sadler  v. 
Evans,  4  Bur.  1984.  Here  the  statute  lays  the  burden  on 
the  master  from  necessity,  and  makes  him  personally  liable 
to  penalties  if  he  neglects  to  perform  the  requisitions  of  it. 
But  still  he  is  entitled  to  charge  the  necessary  fees,  etc., 
upon  his  doing  so,  to  the  account  of  his  owners.  And  in 
this  case  there  can  be  no  doubt  of  the  relation  in  which  the 
master  stood  to  the  plaintiffs ;  for  he  is  the  witness,  and  he 
swears  that  the  money  was  paid  by  the  order  of  the  plain- 
tiffs. Therefore,  they  are  very  well  warranted  to  maintain 
the  action.  If  the  parties  had  gone  to  trial  upon  an  appre- 
hension that  the  only  question  to  be  tried  was,  whether  this 
was  a  case  within  the  Act  of  Parliament,  consequently, 
whether  any  fee  was  due,  the  plaintiffs  could  not  have  been 
permitted  to  surprise  the  defendant  at  the  trial,  by  starting 
another  ground,  upon  which  to  recover  a  Norfolk  groat.  An 
action  for  money  had  and  received  is  governed  by  the  most 
liberal  equity.  Neither  party  is  allowed  to  entrap  the  other 
in  form.  But  here,  the  plaintiff  gave  notice,  that  he  meant 
to  insist  that  too  much  was  taken  ;  and  therefore,  both  came 
to  the  trial  with  equal  knowledge  of  the  matter  in  dispute. 
Therefore,  the  rule  for  a  new  trial  must  be  absolute. 

Lord  Mansfield  added,  that  he  thought  the  plaintiffs  ought 
to  let  the  defendant  know  the  amount  of  the  excess  which 
they  claimed ;  that  the  defendant  might  have  an  opportunity 
of  paying  money  into  court;  and  the  rule  was  drawn  up 
accordingly. 


328  LIABILITY  OF  THIRD  PARTY.  [CH.  XIV. 


3.    Liability  in  tort  for  property  diverted  by  agent. 

a.   General  rule 

§  168.]  THOMPSON  v.  BARNUM. 

49  Iowa,  392.  —  1878. 

Replevin  for  six  ploughs.  Judgment  for  plaintiffs.  De- 
fendants appeal. 

Plaintiffs  made  J.  &  S.  sales  agents  for  ploughs,  and  agreed 
to  take  approved  notes  of  purchasers.  The  ploughs  were 
shipped  and  a  shipping  bill  in  the  name  of  J.  &  S.  was  for- 
warded. J.  &  S.  turned  over  the  ploughs  in  payment  of  a 
debt  due  from  them  to  defendants. 

Day,  J.  The  court  did  not  err  in  holding  that,  under  the 
terms  of  the  order  pursuant  to  which  the  property  in  ques- 
tion was  shipped,  the  title  did  not  pass  from  the  plaintiffs  to 
Johnston  &  Searles,  and  that  they  had  no  authority  to  dis- 
pose of  it  in  payment  of  a  pre-existing  debt  which  they  owed 
the  defendants.  Under  the  terms  of  shipment  Johnston  & 
Searles  were  merely  the  agents  of  plaintiffs,  with  authority  to 
dispose  of  the  implements  in  the  manner  indicated  in  the 
order.  To  hold  that  they  became  either  absolute  or  con- 
ditional purchasers  of  the  ploughs,  it  would  be  necessary  to 
ignore  utterly  many  of  the  provisions  of  the  order  pursuant 
to  which  the  shipment  was  made.  The  plaintiffs  are  not 
estopped  from  insisting  upon  their  rights  in  the  property 
because  of  the  execution  of  the  bill  for  the  ploughs,  set  out  in 
the  court's  finding  of  facts.  The  defendants  were  not  induced 
to  make  their  purchase  because  of  the  existence  of  this  bill. 
From  the  finding  of  facts  it  appears  that  they  had  agreed  to 
take  this  property  in  payment  of  the  debt  due  them,  before 
they  had  any  knowledge  of  the  existence  of  this  bill.  The  bill 
was  referred  to  simply  for  the  purpose  of  ascertaining  the 
price  of  the  ploughs.  For  cases  analogous  in  their  principles 
to  this,  see  Conable  v.  Lynch,  45  Iowa,  84  ;  Bayliss  v.  Davis, 
47  Iowa,  340.  Affirmed. 


§  170.]  MCCAULEY  V.  BEOWN.  329 


b.     Exception :  indicia  of  ownership. 

170.]  McCAULEY  v.  BROWN. 

2  Daly  (N.  Y.  C.  P.),  426.  — 1869. 

Action  to  recover  the  value  of  a  truck  and  set  of  harness 
alleged  to  have  been  converted  by  defendants.  Judgment 
for  plaintiff. 

The  property  was  bought  by  defendants  of  J.  M.,  a  brother 
of  plaintiff.  J.  M.,  with  plaintiff's  knowledge,  had  taken  out 
a  license  in  his  own  name  for  the  truck,  and  had  held  himself 
out  as  owner.  Defendants,  before  buying,  went  to  the 
mayor's  office,  and  ascertained  that  the  license  was  in  the 
name  of  J.  M. 

Barrett,  J.  By  the  provisions  of  the  Revised  Ordin- 
ances of  1859,  p.  356,  §  2,  it  is  made  unlawful ."  for  any 
person  to  receive  or  hold  a  license  to  keep  public  carts, 
or  to  be  a  public  cartman,  unless  he  be  the  actual  owner 
of  the  cart  or  carts  so  licensed."  The  taking  opt  of  the 
license  for  the  truck  in  question  was,  therefore,  a  decla- 
ration of  ownership  made  by  the  plaintiffs  brother,  John 
McCauley,  with  the  plaintiff's  full  knowledge  and  consent, 
upon  which  the  defendants  had  a  right  to  and  did  rely 
in  making  the  purchase.  These  facts,  coupled  with  John 
McCauley's  actual  possession,  and  seeming  ownership,  bring 
the  Case  within  thft  principles  that  when  t.hp  nwnpr  nf  gprwjs 
stands  by  and  permits  another  to  treat  them  as  his  own, 
wjiereby  a  third  person  is  led  to  purchase  them  in  good  faith, 

the  former  Cannot  recover  the  goods,  nr  tppir  value,  frnm  the 

buyer.  Thompson  v.  Blanchard,  4  N.  Y.  303  ;  Hibbard  v. 
Stewart,  1  Hilt.  207;  Brewster  v.  Baker,  16  Barb.  613; 
Cheeney  v.  Arnold,  18  Barb.  434 ;  Dezell  v.  Odell,  3  Hill, 
215 ;  Pickard  v.  Sears,  6  Ad.  &  El.  469 ;  Gregg  v.  Wells, 
10  Ad.  &  El.  90.  The  doctrine  applies  although  the  plain- 
tiff was  not  present  when  the  bargain  was  made.  It  is 
sufficient  that,    by  his    previous   conduct,  he  enabled   his 


330  LIABILITY   OF  THIKD  PARTY.  [CH.  XIV. 

brother  to  assume  the  credit  of  ownership,  and  to  deceive 
the  defendants.     Thompson  v.  Blanchard,  supra. 

The  judgment  with  respect  to  the  truck  was,  therefore, 
erroneous ;  and  as  there  was  no  evidence  of  the  separate 
value  of  the  harness,  except  the  wholly  insufficient  statement 
of  what  the  plaintiff  had  paid  for  it  some  seven  months 
prior  to  the  sale,  we  have  no  basis  for  a  modification  of  the 
judgment.  Besides,  the  conduct  of  these  brothers  savors 
very  strongly  of  collusion.  John  McCauley  had  previously 
offered  the  truck  for  sale,  with  the  plaintiffs  knowledge,  and 
seemingly  with  his  consent  —  certainly  without  any  expres- 
sion of  his  disapprobation.  From  these  and  other  unfavor- 
able circumstances,  such  as  the  plaintiffs  failure  to  assert 
his  title  upon  the  discovery  of  the  property  in  the  defendants' 
possession,  we  are  not  inclined  to  strain  a  point  with  respect 
to  the  evidence  of  value,  for  the  purpose  of  upholding  this 
judgment,  even  in  part.  It  is  fairer  to  leave  the  parties  in 
such  a  position,  that  the  plaintiff  may,  if  he  thinks  fit,  bring 
a  fresh  action  for  the  value  of  the  harness,  when  the  defend- 
ants can  have  these  facts  and  circumstances  submitted  to  a 
jury,  upon  the  question  of  collusion  and  authority. 

The  judgment  should  be  reversed. 


§  170.]  PICKERING  v.  BUSK.      - 

15  East  (K.  B.),  38.  —  1812. 
[Reported  herein  at  p.  223.] 

c.    Exception :  Factors  Act. 

§§170,171.]  BIGGS  v.   EVANS. 

1894,  1  Queen's  Bench  Division,  88. 

Action  to  recover  possession  of  personal  propert}',  in- 
trusted to  one  Geddes,  and  b}-  Geddes  sold  to  defendant. 
Action  tried  by  "Wills,  J.,  without  a  jury. 


§§  170,  171.]  BIGGS  V.   EVANS.  331 

Wills,  J.,  delivered  judgment  as  follows  :  — 
The  plaintiff  was  the  owner  of  a  valuable  table-top  made  of 
what  is  called  opal  matrix,  an  exceptional  article,  but  of  a 
class  in  which  jewellers  and  dealers  in  gems  might  be  ex- 
pected to  deal. 

In  the  year  1886  he  sent  it  to  the  business  premises  of  a 
person  named  Geddes,  who  was  a  dealer  in  jewels  and  gems, 
and  who  also,  as  a  part  of  his  business,  and  as  a  known  part 
of  his  business,  sold  such  things  for  other  people  in  his  own 
name,  and  having  them  in  his  possession.  The  following 
letter  gives  the  terms  of  the  deposit  :  — 

"Apbil30,  1886. 

"I  will  intrust  you  with  the  sale  of  my  opal  table  upon 
the  following  conditions.  That  the  table  shall  not  be  sold  to 
any  person  nor  at  any  price  without  my  authorization  is  first 
obtained  that  such  sale  shall  be  effected.  That  the  check 
handed  to  you  in  payment  for  the  table  shall  be  paid  over  to 
me  intact  for  me  to  pay  into  my  bankers,  and  that  I  shall  pay 
for  commission  on  the  sale  of  the  table  one-third  of  the  bal- 
ance which  remains  after  deducting  cost  of  stone  mounting 
and  all  expenses  incurred  by  me  in  connection  with  the 
same." 

Geddes,  in  the  year  1888,  sold  the  table  out  and  out  to  the 
defendant  for  £200,  which  was  satisfied  as  follows  :  Geddes 
asked  the  defendant  to  pay  £170  for  him  to  Streeter,  a  West 
End  jeweller,  in  satisfaction  of  a  judgment  which  Streeter 
had  obtained  against  him,  and  to  pay  him  (Geddes)  £30  in 
cash.  The  defendant  did  not  pay  Streeter  £170,  but  gave 
him  a  diamond  valued  between  him  and  Streeter  at  £120, 
and  paid  him  £50  in  cash. 

Geddes  shortly  afterwards  became  bankrupt  and  disap- 
peared. The  table-top  at  the  time  of  action  brought  was  in 
the  possession  of  Streeter,  who  was  holding  it  for  the  de- 
fendant. The  plaintiff  claims  to  recover  the  table-top  from 
the  defendant.  The  defendant  resists  the  claim  on  two 
grounds :  First,  he  sa}rs  that  at  common-law  the  plaintiff  is 
estopped  from  denying  his  title.  Secondly,  that  he  is  pro- 
tected by  the  Factors  Acts,  from  which,  of  course,  the  Act 


332  LIABILITY   OF  THIRD  PARTY.  [CH.  XIV. 

of  1889  must  be  excluded,  as  the  trausaction  took  place  be- 
fore it  was  passed.1 

The  claim  of  the  defendant  at  common-law  is  put  thus  :  It 
is  said  that  the  plaintiff  enabled  Geddes  to  sell  the  table-top 
as  his  own,  and  that  his  doing  so  was  within  the  scope  of  his 
authority,  as  it  would  be  understood  by  persons  who  dealt 
with  him,  and  that,  as  he  had  put  it  in  the  power  of  Geddes 
to  commit  the  fraud,  his  must  be  the  loss. 

I  think,  however,  that  a  fallacy  underlies  the  expression 
that  he  enabled  Geddes  to  commit  the  fraud.  In  one  sense, 
and  one  only,  did  he  do  so.  He  gave  him  the  corporal  pos- 
session of  the  table-top,  and  it  was  that  possession  which 
enabled  Geddes  to  sell  it  as  his  own,  or  b}r  way  of  a  transac- 
tion within  the  scope  of  his  apparent  authority,  as  a  person 
carrying  on  a  business  in  which  such  sales  are  habitually 
effected.  But  it  is  quite  clear  that  it  requires  more  to  found 
the  argument  in  question.  In  one  sense  every  person  who 
intrusts  an  article  to  any  person  who  deals  in  second-hand 
articles  of  that  description  enables  him,  if  so  disposed,  to 
commit  a  fraud  by  selling  it  as  his  own.  A  man  who  lends 
a  book  to  a  second-hand  bookseller  puts  it  into  his  power,  in 
the  same  sense,  to  sell  it  as  his  own.  A  man  who  intrusts 
goods  for  safe  custody  to  a  wharfinger,  who  also  deals  in  his 
own  goods,  or  in  other  people's  goods  intrusted  to  him  for 
sale,  in  such  a  sense  enables  him  to  commit  a  fraud  by  selling 
them  to  a  customer.  But  such  a  transaction  clearly  could  not 
give  a  title  to  a  purchaser  as  against  the  owner.  The  true 
test  is,  I  take  it,  whether  the  authorit}7  given  in  fact  is  of 
such  a  nature  as  to  cover  a  right  to  deal  with  the  article  at 
all.  If  it  does,  and  the  dealing  effected  is  of  the  same  nature 
as  the  dealing  contemplated  by  the  authority,  and  the  agent 
carries  on  a  business  in  which  he  ordinarily  effects  for  other 

1  52  &  53  Vict,  c  45,  which  by  section  14,  and  the  schedule  repeals  the 
earlier  Factors  Acts,  preserving  any  right  acquired  or  liability  incurred 
before  the  commencement  of  the  Act.  The  provisions  corresponding  to 
6  Geo.  4,  c.  94,  s.  4,  are  contained  in  section  1,  sub-section  1,  and  section  2, 
sub-section  1,  of  the  Act  now  in  force. 


§§  170,  171.]  BIGGS  V.  EVANS.  333 

people  such  dispositions  as  he  does  effect,  what  he  has  done 
is  within  the  general  authority  conferred,  and  any  limitations 
imposed  as  to  the  terms  on  which,  or  manner  in  which,  he  is 
to  sell  are  matters  which  may  give  a  right  of  action  by  the 
principal,  but  cannot  affect  the  person  who  contracts  with 
the  agent.  It  is  within  the  scope  of  the  authority  that  the 
agent  should  sell  the  goods  on  some  terms,  and  it  is  not  usual 
in  the  trade  to  inquire  into  the  limits  or  conditions  of  an  au- 
thority of  that  kind  ;  and  therefore  the  principal  is  supposed, 
as  respects  other  people,  to  have  clothed  the  agent  with  the 
usual  authority.  The  foundation,  however,  of  the  whole  thing 
is  that  the  agent  should  be  authorized  to  enter  into  some  such 
transaction.  If  the  principal  has  intrusted  the  goods  to  the 
agent  for  some  other  purposes,  the  agent  is  acting  outside  his 
authority  in  selling  at  all,  and  then  the  principal,  whose  goods 
have  been  disposed  of  without  any  authority  at  all  so  to  do, 
is  entitled  to  recover  them  in  spite  of  the  disposition. 

Now  in  the  present  case,  the  letter,  taken  as  a  whole,  shows 
that  the  table-top  never  was  intrusted  to  Geddes  to  sell. 
He  was  forbidden  in  express  terms  to  sell  without  further 
authority.  He  was  not  to  sell  the  table-top,  but  to  keep  it 
safely  for  the  plaintiff  until  a  further  authority  was  given ; 
and  I  think  he  sold,  not  violating  instructions  as  to  the  terms 
on  which  he  should  effect  a  sale,  but  in  spite  of  a  prohibition 
to  sell  at  all  till  some  further  authority  should  be  given.  At 
common-law,  therefore,  I  think  the  plaintiff  is  entitled  to 
succeed. 

Do  the  Factors  Acts  protect  the  defendant?  I  think  not. 
I  think  it  is  an  essential  condition  of  the  validity  of  a  sale 
protected  by  them  that  the  goods  should  have  been  intrusted 
to  the  agent  for  sale.  I  think  the  Factors  Acts  would  appty, 
so  far  as  relates  to  the  business  which  Geddes  was  carrying 
on,  the  nature  of  the  article  dealt  in,  and  what  was  usual  in 
such  a  trade.  But  the  defect  that  the  article  never  was 
intrusted  to  him  for  sale  is  fatal. 

I  think  there  is  another  difficulty.  In  order  to  validate  pay- 
ment to  the  agent  under  6  Geo.  4,  c.  94,  s.  4,  it  must  be 


334  LIABILITY   OF  THIRD  PARTY.  [CH.  XIV. 

made  in  the  ordinary  course  of  business,  that  is,  by  cash  or 
check  or  bill,  as  the  case  may  be.  I  do  not  think  that  buy- 
ing up  a  judgment  from  some  one  else,  partly  by  delivery  of 
a  diamond  of  the  defendant's  own,  can  be  considered  as  pay- 
ment in  the  ordinary  course  within  the  section.  And  there  is 
good  reason  for  it.  If  the  agent  gets  cash,  he  may  be  able 
to  hand  it  to  his  principal ;  but  if  he  does  not  get  cash,  and 
there  is  only  a  transaction  of  this  kind,  he  cannot  if  impecu- 
nious pay  the  principal ;  it  is  out  of  his  power  to  do  so. 

I  am  of  opinion,  therefore,  that  judgment  must  be  entered 
for  the  plaintiff,  with  costs. 

Judgment  for  the  plaintiff. 


4.  Liability  for  collusive  fraud. 

§  175.]         MAYOR,  &c.  OF   SALFORD  v.  LEVER. 

1891,  1  Queen's  Bench  Division  (C.  A.),  168. 

Action  for  damages  for  fraud,  or,  in  the  alternative,  for 
money  had  and  received^,   Judgmjmjbjorplaintiffs.      <*^<X-»«^a^. 

Defendant  bribed  plaintiffs'  purchasing  agent  to  accept 
defendant's  offer  to  supply  coal  to  plaintiffs.  Upon  dis- 
covering the  fraud  plaintiffs  stayed  action  against  the  agent 
upon  his  agreement  to  furnish  evidence  against  defendant 
and  others,  to  pay  the  costs  of  the  action  against  them,  and 
to  guarantee  an  aggregate  recovery  of  £10,000,  for  which  he 
gave  security. 

Lord  Esher,  M.  R.  The  corporation  of  Salford  have 
brought  this  action  against  the  defendant,  who  is  a  coal 
merchant,  and  it  is  an  action  founded  on  fraud.  What  is 
the  fraud  which  the  defendant  had  committed?  He  had  coals 
to  sell,  and  he  was  obliged  to  make  a  bargain  with  the  cor- 
poration through  their  agent,  a  man  who,  no  doubt,  would  be 
known  in  Salford  as  having  the  power  to  make  contracts  for 
the  corporation,  and  who,  consequently,  would  be  looked  to 


§  175.]  MAYOR   V.   LEVER.  335 

bj-  traders.  The  defendant  knew  that  this  man  was  the 
agent  of  the  corporation,  and  that  it  was  his  duty  to  buy 
coals  for  them  at  the  price  at  which  the  defendant  or  some 
other  trader  was  willing  to  sell  them.  The  defendant  was  at 
liberty  to  sell  the  coals  at  an}-  price  he  could  get  for  them, 
not  necessarily  at  market  price,  but  at  the  best  price  which 
he  could  obtain.  He  was  bound,  however,  to  act  honestly. 
He  offered  this  man  Hunter  to  sell  him  coal  at  a  price  which 
would  give  him  such  a  profit  as  he  desired.  But  then  Hunter 
tempted  him  by  saying,  "  You  want  to  sell  your  coals  at  a 
price  which  will  give  you  a  profit.  I  have  the  power  of  buying 
coals  from  you  or  from  anybody  else,  and  I  will  not  buy  them 
from  }*ou  at  the  price  at  which  }*ou  are  willing  to  sell  them, 
unless  3'ou  will  help  me  to  cheat  the  corporation  out  of 
another  shilling  a  ton.  You  are  to  have  jour  price  ;  but  you 
are  to  add  to  it  in  the  bills  which  you  send  to  the  corporation 
another  shilling  per  ton,  making  the  real  price  apparently  a 
shilling  per  ton  more  ;  but  that  shilling  is  to  be  mine,  —  you 
are  to  give  it  to  me."  They  call  this  a  commission,  a  term 
very  well  known,  at  all  events  in  the  North  of  England ;  and 
commissions  sometimes  cover  a  multitude  of  sins.  In  the 
present  case  it  was  meant  to  cover  a  fraud.  The  fraud  was 
this,  that  the  defendant  allowed  and  assisted  the  agent  of 
the  corporation  to  put  down  a  false  figure  as  the  price  of  the 
coals  in  order  to  cheat  the  corporation  out  of  a  shilling  a  ton, 
which  was  to  be  paid  to  their  own  agent ;  and  the  waj-  in 
which  it  was  done  was  this :  the  defendant  sent  in  a  bill  to 
the  corporation  for  the  whole  price  thus  increased.  He  got 
the  advanced  price  into  his  hands,  and  as  he  got  it  by  fraud 
he  is  bound  to  pay  it  back,  unless  8omething_ha3_happened 
to  oust  the  right  of  t.hp  r»nrpnratinn._  The  damage  to  the  cor- 
poration is  clearly  the  one  shilling  per  ton,  out  of  which  they 
have  been  cheated,  neither  more  nor  jess.  The  form  of  the 
action,  on  which  some  stress  has  been  laid  in  the  argument, 
is  immaterial.  Unless  something  has  happened  to  oust  the 
right  of  the  corporation,  they  are  entitled  to  sue  the  defendant 
for  the  one  shilling  a  ton  in  one  form  of  action  or  another, 


336  LIABILITY   OF  THIRD  PARTY.  [CH.  XIV. 

although  he  has  parted  with  the  money,  and  has  handed  it 
over  to  his  confederate  Hunter,  because  it  was  onoe  in  his 
hands,  and  he  is  liable  for  the,  fraud  to  which  he  was  thus  .a 
party. 

But  the  defendant  says  that  something  has  happened  which 
prevents  the  corporation  from  enforcing  this  right,  and  the 
first  ground  which  was  taken  was  this :  that  this  money  which 
came  into  his  hands  passed  into  the  hands  of  Hunter,  the 
agent  of  the  corporation,  and  they  have  recovered  it,  or  part 
of  it,  from  Hunter,  and  therefore  cannot  recover  it  from  the 
defendant.  This  defence  was  advanced  independently  of, 
and  without  reference  to,  the  agreement  between  the  corpora- 
tion and  Hunter.  On  what  ground  have  the  corporation  re- 
covered the  money  from  Hunter?  Hunter,  their  agent,  had 
received  money  from  the  defendant,  for  the  performance  of  a 
duty  which  he  was  bound  to  perform  without  any  such  pay- 
ment. Nothing  could  in  law  be  more  fraudulent,  dangerous, 
or  disgraceful,  and  therefore  thejaw  has  struck  at  such  con- 
duct in  this  way.  Tt_says  that,  if  an  agent  takes  a  bribe 
from  a  third  person.,  whether  he  calls  it  a  commission  or  by 
anyntlipr  name,  for  thp  performance  of  n.  duty  mrhiVh  ha  \e 
bound  tO  perform  for  his  principal,  hp  tnnat.  gn>Pf  np  to  his  prin- 
cipal whatever  he  has  by  reason  of  thp  franr!  rpppivpri  hpyond 

his  due.  It  is  a  separate  and  distinct  fraud  of  the  agent.  He 
might  have  received  the  money  without  any  fraud  of  the  per- 
son who  was  dealing  with  him.  Suppose  that  person  thought 
that  the  agent  was  entitled  to  a  commission,  —  he  would  not 
be  fraudulent;  but  tbe  agent  would  be,  and  it  is  because 
of  his  separate  and  distinct  fraud  that  the  law  says  he  must 
give  up  the  monej'  to  his  principal.  It  signifies  not  what  it 
may  be  called,  whether  damages  or  money  had  and  received, 
the  foundation  of  the  claim  of  the  principal  is1  that,  there  is  a 
separate  and  distinct  fraud  by  his  agent  upon  him,  and  there- 
fore he  is  entitled  to  recover  from  the  agent  the  sum  which  he 
has  received.  But  does  this  prevent  the  principal  from  suing 
the  third  person  also,  if  he  had  been  fraudulent,  because  of 
his  fraud  ?    It  has  been  settled  that,  if  the  principal  brings 


§  175.]  MAYOR   V.   LEVER.  337 

BjUfifcjflB  Against  tiio  ttnrri  pprson  fj^st.  he  cannot  set  up  the 
defence  that  the  action  cannot  be  maintained  against,  hifli 
lwansft  t.hp.  thing  was  donp  through  thp.  agent,  and  the  prjn- 
cipal  was  entitled  to  sue  the  agent.  What  difference  can  it 
make  that  the  principal  sues  the  third  party  secondly  instead 
of  first?  The  agent  has  been  guilty  of  two  distinct  and  inde- 
pendent frauds,  —  the  one  in  his  character  of  agent,  the  other 
by  reason  of  his  conspiracy  with  the  third  person  with  whom 
he  has  been  dealing.  Whether  the  action  by  the  principal 
against  the  third  person  was  the  first  or  the  second  must  be 
wholly  immaterial.  The  third  person  was  bound  to  pay  back 
the  extra  price  which  he  had  received,  and  he  could  not 
absolve  himself  or  diminish  the  damages  b}-  reason  of  the 
principal  having  recovered  from  the  agent  the  bribe  which  he 
had  received. 

But  then  the  defendant  says  —  and  this  is  his  second 
ground  —  that,  even  if  this  be  so,  the  corporation  have 
entered  into  an  agreement  with  their  agent,  Hunter,  which 
prevents  them  from  suing  the  defendant  in  respect  of  the 
combined  fraud  of  Hunter  and  himself.  There  is  a  well 
settled  rule  that,  if  there  are  two  joint  tort-feasors,  and  flip, 
third  person  to  whom  the  wrong  has  been  done  releases  one 
ofthe  two,  he  cannot  afterwards  sue  the  other.  That  is  a 
well-known  rule.  Whether  the  rule  goes  further,  and  ex- 
tends  to  an  accord  and  satisfaction  with  one  tort-feasor,  it  is 
immaterial  now  to  consider.  Let  us  see  what  has  been  done. 
It  is  said  that  the  corporation  have  entered  into  an  agree- 
ment with  Hunter.  Though  the  corporation  will  not  take 
the  objection  that  the  agreement  is  not  under  seal,  I  am  not 
sure  that  the  court  ought  not  to  take  it,  seeing  that  the  de- 
fendant has  been  guilty  of  a  fraud.  There  is  in  fact  no 
agreement  at  all  which  is  binding  on  the  corporation,  because 
the  alleged  agreement  does  not  bear  their  seal.  First,  then, 
there  is  no  agreement ;  and,  secondly,  even  supposing  there 
is  an  agreement  such  as  the  defendant  alleges,  namely,  that 
the  corporation  undertook  to  bring  actions  in  the  first  in- 
stance against  the  third  parties,  at  his  request  and  at  his 

22 


338  LIABILITY   OF  THIRD  PARTY.  [CH.  XIV. 

expense,  to  recover  the  extra  price  which  the}-  had  received, 
that  would  not,  so  far  as  I  can  see,  be  a  compromise  of  a 
doubtful  claim.  It  was  an  absolute  agreement  entered  into 
by  the  officers  of  the  corporation,  and,  if  it  were  binding  on 
the  corporation,  the}'  bound  themselves  to  bring  the  actions 
at  the  request  of  Hunter,  and  thus  lost  their  independence  as 
to  whether  those  actions  should  proceed  or  not.  If  the 
actions  failed,  the  corporation  would  be  primarily  liable  for 
the  costs  to  the  persons  against  whom  they  were  brought.  It 
was  true  they  were  to  get  the  costs  from  Hunter ;  but  they 
would  be  primarily  liable.  They  had  given  up  their  inde- 
pendence, and  had  bound  themselves  to  bring  the  actions, 
whether  they  were  likely  to  be  successful  or  not  They  had 
bound  the  rate-payers  to  pay  the  costs,  in  the  first  instance, 
if  the  actions  failed,  and  to  take  the  chance  of  Hunter  pay- 
ing them,  and,  supposing  Hunter's  securities  proved  insuffi- 
cient, the  rate-payers  would  lose  these  costs.  Under  these 
circumstances,  speaking  for  myself  alone,  I  am  of  opinion 
that  the  agreement  was  wholly  ultra  vires  the  corporation. 
They  had  no  mandate  from  the  rate-payers  to  agree  to  it. 

But,  suppose  the  difficulty  to  to  be  got  over,  what  was  the 
effect  of  the  agreement?  Was  it  a  release  of  Hunter  in 
respect  of  the  combined  fraud?  Certainly  it  was  not  a 
release.  It  did  not  purport  to  be  that.  m  Moreover,  it  was 
not  under  seal,  and  it  cannot  therefore  be  dealt  with  as 
a  release.  And,  when  the  terms  of  the  agreement  are  looked 
at,  it  was  clearly  not  a  release  of  Hunter.  It  is  perfectly 
true,  as  Mr.  Henn  Collins  has  pointed  out,  that  the  agree- 
Tppnt,  mpfply  suspended  the  action  of  the  corporation  against 
Hunter,  and  left  it  open  to  them  to  sue  him  afterwards , 
should  circumstances  arise  in  which  they  might  think  it  right 
to  do  so.  It  was,  in  fact,  nothing  more  than  a  postpone- 
ment of  their  right  of  action,  and  that  of  itself  cannot  pre- 
vent them  from  suing  Lever.  Therefore,  upon  almost  every 
ground  upon  which  the  case  can  be  looked  at,  there  is  no 
defence  to  this  action,  and  the  defendant  is  liable.  I  know 
the  result  of  it  all  may  be  this,  —  that  the  corporation  will 


§  175.]  HEGENMYER  V.  MARKS.  339 

recover  their  money  from  the  defendant,  and  from  other 
traders  in  a  similar  position  against  whom  they  may  proceed, 
and  that  Hunter  will  have  the  benefit  of  it.  Certainly  the 
corporation  cannot  legally  return  to  Hunter  the  money  which 
they  may  thus  recover.  It  belongs  to  the  rate-paj-ers,  and 
the  corporation  have  no  possible  right  to  pay  it  over  to 
Hunter.  But  the  result  will  be  the  same.  These  coal- 
dealers,  who  were  tempted  by  Hunter  and  persuaded  by  him 
to  pay  him  the  bribes,  will  be  the  sufferers.  They  may  be 
ruined  ;  and  Hunter,  when  he  comes  out  of  prison,  may  find 
the  securities,  which  are  the  result  of  his  plunder  and  his 
gross  frauds,  untouched,  and  he  may  retain  the  whole  of  the 
money  which  he  has  received  in  this  way.  I  am  sorry  for  it ; 
but  such,  in  my  opinion,  is  the  law.  It  follows,  therefore, 
that  the  defendant  has  no  defence,  and  the  judgment  of 
the  divisional  court  must  remain,  and  the  appeal  must  be 
dismissed. 

Lindley  and    Lopes,  LL.J.,   also    delivered    concurring 
opinions.  Appeal  dismissed. 


§  175.]  HEGENMYER  v.  MARKS. 

37  Minnesota,  6.  — 1887. 

Action  to  rescind  a  sale  and  conveyance  of  land.  Judg- 
ment for  plaintiff. 

Gilfillan,  C  J.  The  plaintiff  owned  a  lot  of  land  in 
Minneapolis.  One  Creigh  was  a  real-estate  broker,  and  at 
his  request  she  employed  and  authorized  him  to  sell  the  lot 
to  any  one  who  would  purchase  it  at  such  sum  as  would  net 
her  $1,050 ;  Creigh  to  receive  as  his  compensation  whatever 
he  could  get  for  the  lot  in  excess  of  $1,050.  At  the  time  of 
such  employing,  he  (believing  it  to  be  true)  represented  to 
her,  and  she  believed,  that  $1,050  was  the  fair  market  value 
of  the  lot.  Both  of  them  supposed  the  lot  to  be  entirely 
vacant ;  but  a  third  person,  owning  the  adjoining  lot,  had  by 


340  LIABILITY   OF  THIRD  PAETY.  [CH.  XIV. 

mistake  constructed  on  her  lot,  thinking  it  was  his,  a  valuable 
house  and  barn  in  such  manner  that  they  were  part  of  the 
realty.  Neither  plaintiff  nor  Creigh  knew  anything  of  this 
at  the  time  of  the  employing.  With  the  buildings  the  lot  was 
worth  over  $3,000.  Creigh  learned  of  it  before  making  a 
sale,  but  did  not  disclose  it  to  plaintiff.  He  sold  the  lot  to 
defendant  for  $1,150  ;  the  latter  knowing  of  the  buildings  on 
the  lot,  and  knowing  that  Creigh  knew,  and  that  plaintiff  was 
ignorant  of  the  fact.  Of  the  $1,150,  $450  was  paid  in  cash, 
plaintiff  receiving  $350  and  Creigh  $100,  and  $700  was  secured 
by  the  defendant's  note  to  plaintiff  and  his  mortgage  on  the 
lot.  Upon  learning  of  the  facts,  plaintiff  tendered  to  de- 
fendant the  $350,  with  interest,  and  the  note  and  mortgage, 
and  demanded  a  reconveyance  of  the  lot,  which  defendant 
refused.  The  action  is  to  rescind  the  sale  and  conveyance. 
The  court  below  decided  in  favor  of  plaintiff. 

The  decision  of  the  court  below  proceeds  on  the  proposi- 
tions :  First,  that  it  was  the  duty  of  Creigh,  upon  learning  of 
the  buildings  being  upon  the  lot,  to  communicate  that  fact  to 
plaintiff,  and  that  by  selling  the  lot  without  disclosing  that 
fact,  at  a  price  which  he  knew  she  had  put  upon  it_in  igno- 
rance of  that  fact,  he  committed  a  fraud  upon  her ;  and, 
second,  that  defendant,  by  purchasing  with  notice  of  Creigh's 
fraud,  became  a  party  tojt.  If  the  first  proposition  be  cor- 
rect, the  second  follows  as  a  necessary  consequence. 

The  case  turns  upon  whether  it  was  the  duty  of  Creigh, 
before  making  a  sale,  to  disclose  what  he  had  learned  to  his 
principal.  Upon  this  contract  of  agency,  m}-  brethren  are  of 
opinion  (though  it  is  not  mine),  that  when  Creigh  learned  a 
fact  affecting  the  value  of  the  property,  and  of  which  fact  he 
knew  she  was  ignorant  when  she  fixed  the  price,  and  if  he 
had  reason  to  believe  that,  had  she  known  the  fact,  she  would 
have  fixed  a  higher  price  (as  in  this  case  she  undoubtedly 
would),  then  good  faith  towards  his  principal  required  of  him, 
and  it  was  his  legal  duty,  to  disclose  the  fact  to  herbefore_he 
prooeederl  to  sp11t<«io  that  she  might,  if  so  disposed,  fix  the 
selling  price  in  accordance  with  the  actual  condition  of  things. 


§  178.]        BAKER  V.   NEW  YORK,   ETC.   BANK.  341 

This  being  so,  his  selling  upon  the  basis  of  the  price  first 
fixed,  without  disclosing  to  her  the  fact  he  had  learned,  was 
of  course  a  fraud  on  her. 

The  tender  was  sufficient.  Defendant  and  Creigh  were 
parties  to  the  fraud  on  plaintiff,  by  which  Creigh,  one  of  the 
parties,  received  (in  effect)  from  defendant,  the  other  party 
to  it,  $100.  No  consideration  of  equity  or  morality  would 
require  of  plaintiff  to  make  that  good  either  to  Creigh  or  de- 
fendant. All  that  can  be  required  of  her  as  a  condition  of 
her  repudiating  the  transaction  imposed  on  her  by  the  fraud 
of  Creigh  and  defendant  is  to  restore  what  (in  ignorance  of 
the  facts)  she  received  in  the  transaction. 

Judgment  affirmed. 


5.  Liability  in  equity  for  trust  funds  diverted  by  agent. 

§  178.]      BAKER  v.  NEW  YORK  NATIONAL 
EXCHANGE  BANK. 

100  New  York,  31.  — 1885. 

Action  to  recover  the  amount  of  a  check  drawn  upon  de- 
fendant by  "C.  A.  Wilson  &  Bro.,  agents."  The  drawers 
were  commission  merchants  who  were  insolvent,  and  who, 
in  order  to  protect  their  principals,  opened  with  defendant, 
under  the  above  title,  a  deposit  account  to  the  credit  of  which 
they  deposited  the  proceeds  of  the  sales  of  their  principals' 
goods.  The  check  in  question  was  given  in  settlement  of  the 
account  of  the  agents  with  plaintiff,  as  principal.  Defendant 
alleged  that  there  was  no  balance  of  the  account  with  which 
to  pay  the  check,  and  offered  to  prove  that  by  authority  of 
the  agents  they  had  charged  against  the  account  an  individual 
indebtedness  of  the  firm.     This  evidence  was  excluded. 

Andrews,  J.  The  relation  between  a  commission  agent 
for  the  sale  of  goods  and  his  principal  is  fiduciar}'.  The 
title  to  the  goods  until  sold  remains  in  the  principal,  and 


342  LIABILITY   OP  THIRD  PARTY.  [CH.  XIV. 

when  sold,  the  proceeds,  whether  in  the  form  of  money,  or 
notes,  or  other  securities,  belong  to  him,  subject  to  the  lien 
of  the  commission  agent  for  advances  and  other  charges. 
The  agent  holds  the  goods  and  the  proceeds  upon  an  implied 
trust  to  dispose  of  the  goods  according  to  the  directions  of 
the  principal,  and  to  account  for,  and  pay  over  to  him  the 
proceeds  from  sales.  The  relation  between  the  parties  in 
respect  to  the  proceeds  of  sales  is  not  that  of  debtor  and 
creditor  simply.  The  money  and  securities  are  specifically 
the  property  of  the  principal,  and  he  may  follow  and  reclaim 
them,  so  long  as  their  identity  is  not  lost,  subject  to  the 
rights  of  a  bond  fide  purchaser  for  value.  In  case  of  the 
bankruptcy  of  the  agent,  neither  the  goods  nor  their  pro 
ceeds  would  pass  to  his  assignees  in  bankruptcy  for  general 
administration,  but  would  be  subject  to  the  paramount  claim 
of  the  principal.  Chesterfield  Manufacturing  Co.  v.  Dehon, 
5  Pick.  7  ;  Merrill  v.  Bank  of  Norfolk,  19  Id.  32  ;  Thomp- 
son v.  Perkins,  3  Mason,  232  ;  Knatchbull  v.  Hallett,  L.  R. 
13  Ch.  Div.  696  ;  Duguidv.  Edwards,  50  Barb.  288  ;  Story  on 
Agency,  §  229.  <  The  relation  between  a  principal  and  a  con- 
signee for  sale  is,  however,  subject  to  modification  by  express 
agreement,  or  by  agreement  implied  from  the  course  of  busi- 
ness or  dealing  between  them.  The  parties  may  so  deal  that 
the  consignee  becomes  a  mere  debtor  to  the  consignor  for  the 
proceeds  of  sales,  having  the  right  to  appropriate  the  specific 
proceeds  for  his  own  use. 

In  the  present  case  the  bank  account  against  which  the 
check  was  drawn,  represented  trust  monejs  belonging  to  the 
principals  for  whom  Wilson  &  Bro.  were  agents.  The 
deposits  to  the  credit  of  this  account  were  made  in  the  name 
of  the  firm,  with  the  word  "  agents"  added.  The}'  were  the 
proceeds  of  commission  sales.  Wilson  &  Bro.  became  insol- 
vent in  October,  1878,  and  they  opened  the  account  in  this 
form  for  the  purpose  of  protecting  their  principals,  which 
purpose  was  known  to  the  bank  at  the  time.  The  check  in 
question  was  drawn  on  this  account  in  settlement  for  a  bal- 
ance due  to  plaintiffs  upon  cash  sales  made  by  the  drawers 


§  178.]         BAKER  V.  NEW  YORK,   ETC.   BANK.  343 

as  their  agents.  It  is  clear  upon  the  facts  that  the  fund 
represented  by  the  deposit  account  was  a  trust  fund,  and  that 
the  bank  had  no  right  to  charge  against  it  the  individual 
debt  of  Wilson  &  Bro.  The  bank,  having  notice  of  the  char- 
acter of  the  fund,  could  not  appropriate  it  to  the  debt  of 
Wilson  &  Bro.,  even  with  their  consent  to  the  prejudice  of 
the  cestui  que  trusts.  The  supposed  difficult}*  in  maintaining 
the  action  arising  out  of  the  fact  that  the  money  deposited  was 
not  the  specific  proceeds  of  the  plaintiffs'  goods,  is  answered 
b\*  the  case  of  Van  Alen  v.  American  Nat.  Hank,  52  N.  Y. 
1.  Conceding  that  Wilson  &  Bro.  used  the  specific  proceeds 
for  their  own  purposes,  and  their  identity  was  lost,  yet  when 
they  made  up  the  amounts  so  used,  and  deposited  them  in 
the  trust  account,  the  amounts  so  deposited  were  impressed 
with  the  trust  in  favor  of  the  principals,  and  became  substi- 
tuted for  the  original  proceeds  and  subject  to  the  same 
equities.  The  objection  that  the  deposit  account  represented 
not  only  the  proceeds  of  the  plaintiffs'  goods,  but  also  the  pro- 
ceeds of  the  goods  of  other  persons,  and  that  the  other  par- 
ties interested  are  not  before  the  court,  and  must  be  brought 
in  in  order  to  have  a  complete  determination  of  the  contro- 
versy, is  not  well  taken.  The  objection  for  defect  of  parties 
was  not  taken  in  the  answer,  and  moreover  it  does  not  appear 
that  there  are  an}*  unsettled  accounts  of  Wilson  &  Bro.  with 
any  other  person  or  persons  for  whom  they  were  agents. 
The  check  operated  as  a  setting  apart  of  so  much  of  the 
deposit  account  to  satisfy  the  plaintiffs'  claim.  It  does  not 
appear  that  the  plaintiffs  are  not  equitably  entitled  to  this 
amount  out  of  the  fund,  or  that  there  is  any  conflict  of  inter- 
est between  them  and  any  other  person  or  persons  for  whom 
Wilson  &  Bro.  acted  as  consignees.  The  presumption,  in 
the  absence  of  any  contrary  indication,  is,  that  the  fund  was 
adequate  to  protect  all  interests,  and  that  Wilson  &  Bro. 
appropriated  to  the  plaintiffs  only  their  just  share. 

We  are  of  opinion  that  the  judgment  was  properly  directed, 
and  it  should  therefore  be  affirmed. 

All  concur.  Judgment  affirmed. 


344  LIABILITY   OF  THIRD  PARTY.  [CH.  XIV. 


§178.]     RIEHL  v.  EVANSVILLE  FOUNDRY 
ASSOCIATION. 

104  Indiana,  70.  — 1885. 

Action  to  have  defendant  declared  a  trustee  of  certain 
real  estate  for  benefit  of  plaintiff.     Judgment  for  plaintiff. 

Elliott,  J.  The  substantial  averments  of  the  appellee's 
complaint  are  these :  Frederick  A.  Riehl  was  the  appellee's 
book-keeper  and  salesman,  and,  in  that  capacity,  received 
of  its  money  $6,000  which  he  embezzled ;  with  the  money 
embezzled  he  bought  real  estate,  caused  the  title  to  be  made 
to  his  wife,  and  built  a  house  on  the  real  estate  so  purchased 
and  conveyed  to  her;  that  she  had  no  money  of  her  own 
with  which  to  purchase  the  property,  but,  with  knowledge 
of  her  husband's  fraudulent  appropriation  of  his  employ- 
er's money,  took  the  title  to  the  property  for  the  purpose  of 
defrauding  his  employer. 

A  book-keeper  or  salesman,  who  receives  the  money  of 
his  employer  by  virtue  of  his  employment,  does  receive  it  in 
a  fiduciary  capaeit}-,  and  if  he  fraudulent!}'  appropriates  it  to 
his  own  use,  he  is  guilty  of  a  breach  of  trust.  The  funds 
which  come  into  the  hands  of  an  agent  for  his  principal  are 
trust  funds,  and  the  latter,  as  the  beneficiary,  becomes  in 
equity  the  owner  of  the  property  purchased  by  the  agent 
with  these  funds.  Where  one  occupies  the  position  of  a  trustee, 
either  b}'  express  appointment  or  by  implication  of  law,  and 
wrongfully  uses  the  money  received  by  him  as  trustee  in  the 
purchase  of  property,  the  beneficiaiy  may  follow  it  into  the 
property.  Pomeroy  Eq.  Juris,  sec.  1051 ;  Story  Eq.  Juris, 
sec.  1260 ;  Bank  of  America  v.  Pollock,  4  Edw.  Ch.  215  ; 
Taylor  v.  Plumer,  3  M.  &  S.  562  ;  Pugh  v.  Pugh,  9  lnd. 
132  ;  Newton  v.  Porter,  69  N.  Y.  133  (25  Am.  R.  152). 

"The  trust,"  says  Mr.  Bigelow,  "will  follow  the  estate 
into  the  hands  of  all  purchasers  with  notice,  and  of  volun- 
teers or  persons  taking  by  gift  or  descent  from  the  trustees." 
Bigelow,  Eq.  63. 


§  178.]      EIEHL  V.   EVAN8VILLE  FOUNDRY  ASS'N.       345 

In  this  instance,  Mrs.  Riehl  was  a  volunteer,  and  had 
notice  of  the  trust  Clearly  enough,  she  cannot  successfully 
resist  the  effort  of  the  beneficiary  to  follow  the  money  into 
the  property  conveyed  to  her. 

The  complaint  is  not  one  by  a  creditor  to  set  aside  a  fraud- 
ulent conveyance  of  property,  but  is  one  to  enforce  a  trust 
arising  by  implication  of  law.  Where  an  agent,  in  violation 
of  his  trust,  uses  the  money  of  his  principal,  the  law  implies 
a  trust  in  favor  of  the  principal,  and  to  enforce  the  trust  thus 
implied  equity  will  subject  the  property  purchased  to  the 
claims  of  the  principal,  as  against  either  a  volunteer  or  a 
fraudulent  grantee.  It  is  this  equitable  principle  which  the 
complaint  invokes. 

Cases  are  cited  holding  that  where  an  agent  embezzles 
money  from  his  employer  and  invests  it  in  property,  the  prin- 
cipal cannot  follow  the  trust  into  the  property,  because  the 
remedy  against  the  agent  is  by  a  criminal  prosecution. 
Campbell  v.  Drake,  4  Ire.  Eq.  94  ;  Pascoag  Bank  v.  Hunt, 
3  Edw.  Ch.  583. 

We  have  no  doubt  that  these  cases  were  not  well  decided. 
They  are  in  conflict  with  the  very  great  weight  of  authority, 
and  are  unsound  in  principle.  The  fact  that  the  agent  may 
be  criminally  prosecuted  does  not  affect  the  right  of  the  prin- 
cipal to  get  back  his  money.  With  quite  as  much  reason 
might  it  be  urged  that  the  principal  could  not  take  from  the 
embezzler  the  money,  if  found  on  his  person,  because  he  can 
be  punished  by  a  criminal  prosecution,  as  to  urge  that  the 
principal  cannot  follow  the  trust  because  the  embezzler  is 
liable  to  be  punished  by  a  prosecution  at  the  instance  of  the 
State.  There  is  no  conceivable  reason  whj-  the  wronged  em- 
ployer may  not  secure  his  mone}',  and  the  embezzler  be  also 
punished.  The  punishment  is  not  to  vindicate  or  reward  the 
principal,  but  to  protect  the  community  from  the  criminal 
acts  of  embezzlers. 

We  agree  with  counsel  that  the  beneficiary  cannot  follow 
the  trust  into  the  property  purchased  by  the  agent,  and  also 
compel  payment  of  the  money  from  the  agent.    Darker  v. 


346  LIABILITY   OF  THIRD   PARTY.  [CH.  XIV. 

Barker,  14  Wis.  142 ;  Murray  v.  Lylburn,  2  Johns.  Ch. 
441.  But  that  question  does  not  arise  in  this  case.  Here 
the  beneficiary  seeks  to  subject  the  property  bought  with 
the  trust  funds  to  its  claims,  and  does  not  seek  to  coerce  the 
agent  to  also  refund  the  money  embezzled.  The  rule  of 
which  we  are  speaking  does  not  forbid  the  beneficiary  from 
obtaining  a  judgment  against  the  agent  for  the  sum  remain- 
ing due  after  deducting  the  value  of  the  property,  and,  under 
our  system,  the  plaintiff  in  such  a  case  as  this  may,  in  one 
action,  obtain  both  equitable  and  legal  relief.  This  is  what 
the  complaint  seeks,  and  it  is  not  vulnerable  to  a  demurrer, 
even  though  it  may  demand  too  much,  for  a  complaint  suf- 
ficient to  entitle  the  plaintiff  to  some  relief  will  repel  a 
demurrer. 

(The  court  then  decides  that  the  evidence  is  sufficient  to 
sustain  the  finding  and  judgment  of  the  trial  court). 

Judgment  affirmed. 


PART  IV. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN 
THE  AGENT  AND  THIRD  PARTIES. 


CHAPTER  XV. 

CONTRACT  RELATIONS  BETWEEN  AGENT  AND  THIRD 
PARTY. 

1.   Liability  of  agent  upon  an  unauthorized  contract. 

§  183.]  KROEGER  v.  PITCAIRN. 

101  Pennsylvania  State,  311.— 1882. 

Case,  to  recover  damages  against  an  agent  for  loss  sus- 
tained b}r  plaintiff  in  consequence  of  the  agent's  representa- 
tions.   Judgment  for  defendant  non  obstante  veredicto. 

Defendant  was  acting  as  agent,  for  a  fire  insurance  com- 
pany, and  represented  to  plaintiff  that  the  company,  notwith- 
standing the  terms  of  the  policyt  would  allow  plaintiff  to  keep 
petroleum.  Defendant  had  no  authority  to  make  this  repre- 
sentation, and  the  policy  was  Rnnnessfnlly  defended  by  the 
company. 

Sterrett,  J.  The  subject  of  complaint,  in  both  specifi- 
cations of  error,  is  the  entry  of  judgment  for  defendant  non 
obstante  veredicto.  It  is  contended  that,  upon  the  facts  es- 
tablished by  the  verdict,  judgment  should  have  been  entered 
thereon  in  favor  of  plaintiff.  The  jury  were  instructed  to 
return  a  verdict  for  the  amount  claimed  by  him,  if  they  were 
satisfied  the  allegations  of  fact  contained  in  the  point  pre- 
sented by  him  were  true.  In  view  of  this,  the  finding  in  his 
favor  necessarily  implies  a  verification  of  the  several  matters 


348      AGENT  AND  THlliD  PARTY  :   CONTRACTS.     [CH.  XV. 

specified  in  plaintiffs  point,  and  hence  it  must  now  be  re- 
garded as  containing  a  truthful  recital  of  the  circumstances 
connected  with  the  delivery  of  the  policy  and  payment  of  the 
premium. 

The  transaction,  as  therein  detailed,  clearly  amounted  to  a 
mutual  understanding  or  agreement  between  the  parties  that 
the  stock  of  merchandise  mentioned  in  the  policy  should 
include  one  barrel  of  carbon  oil ;  in  other  words,  that  the 
plaintiff  should  have  the  privilege  of  keeping  that  quantity  of 
oil  in  connection  with  and  as  a  part  of  the  stock  insured, 
without  thereby  invalidating  his  polic}*.  It  is  impossible  to 
regard  the  transaction  in  any  other  light.  The  jury  found 
that  plaintiff  "  took  the  policy  upon  the  faith "  of  the 
representations  made  by  defendant.  These  representations 
were  not  merely  expressions  of  opinion  as  to  the  meaning  of 
the  polic}'.  On  the  contrar}',  the  defendant,  acting  as  its 
agent  and  assuming  authorit}"  to  speak  for  the  insurance 
compan}',  asserted  without  any  qualification  that  when  car- 
bon oil  was  kept  as  plaintiff  was  in  the  habit  of  keeping  it  — 
a  single  barrel  at  a  time  —  it  was  unnecessary  to  mention 
the  fact  in  the  policy,  or  otherwise  obtain  the  consent  of  the 
companj' ;  that  no  notice  is  ever  taken  of  it  unless  "  it  is  kept 
in  large  quantit}'  —  say  several  hundred  barrels.  In  that 
case,  when  it  is  wholesale,  it  should  be  mentioned ;  but  as 
long  as  it  is  kept,  not  more  than  a  barrel  in  the  store  at  a 
time,  it  is  considered  as  general  merchandise,  and  is  not 
taken  notice  of  in  any  other  way."  Such  was  the  language 
employed  by  defendant,  evidently  for  the  purpose  of  dis- 
pelling any  doubt  that  existed  in  the  mind  of  the  plaintiff, 
and  inducing  him  to  accept  the  policy  and  pay  the  pre- 
mium ;  and  to  that  end  at  least  it  was  successful.  "What  was 
said  and  done  by  defendant,  in  the  course  of  the  transaction, 
amounted  to  more  than  a  positive  assurance  that  the  accepted 
meaning  of  the  policy  was  as  represented  by  him.  In  effect, 
if  not  in  substance,  his  declarations  were  tantamount  to  a 
proposition,  on  behalf  of  the  company  he  assumed  to  rep- 
resent, that  if  the  insurance  was  effected  it  should  be  with 


§  183.]  KEOEGEE  V.  PITCAIRN.  349 

the  understanding  that  a  barrel  of  carbon  oil  was  included  in 
and  formed  part  of  the  insured  stock  of  merchandise,  without 
being  specially  mentioned  in  the  policy. 

The  plaintiff  doubtless  so  regarded  his  declarations,  and 
relying  thereon,  as  the  jury  has  found,  accepted  the  policy 
on  the  terms  proposed,  and  thus  concluded,  as  he  believed, 
a  valid  contract  of  insurance,  authorizing  him  to  keep  in 
stock,  as  he  had  theretofore  done,  a  small  quantity  of  carbon 
oil.  It  was  not  until  after  the  property  was  destroyed  that 
he  was  undeceived.  He  then  discovered,  that  in  consequence 
of  defendant  having  exceeded  his  authority,  he  was  without 
remedy  against  the  company. 

Has  he  any  remedy  against  the  defendant,  by  whose  un- 
authorized act  he  was  placed  in  this  false  position?  We 
think  he  has.  If  the  president,  or  &ny  one  duly  authorized 
to  represent  the  company,  had  acted  as  defendant  did,  there 
could  be  no  doubt  as  to  its  liability.  Wh}T  should  not  the 
defendant  be  personally  responsible,  in  like  manner,  for  the 
consequences,  if  he,  assuming  to  act  for  the  compan}*,  over- 
stepped the  boundary  of  his  authority,  and  thereby  misled  the 
plaintiff  to  his  injury,  whether  intentional^  or  not  ? 

The  only  difference  is,  that  in  the  latter  the  authority  is 
self-assumed,  while  in  the  former  it  is  actual ;  but  that  can- 
not be  urged  as  a  sufficient  reason  wh}-  plaintiff,  who  is 
blameless  in  both  cases,  should  bear  the  loss  in  one  and  not  in 
the  other.  As  a  general  rule,  "  whenever  a  part}-  undertakes 
to  do  any  act  as  the  agent  of  another,  if  he  does  not  possess 
anv  authority  from  the  principal  therefor,  or  if  he  exceeds  the 
authority  delegated  to  him,  he  will  be  personally  liable  to 
the  person  with  whom  he  is  dealing,  for  or  on  account  of  his 
principal."  Story  on  Agency,  §  264.  The  same  principle 
is  recognized  in  Evans  on  Agenc}',  301 ;  Whart.  on  Agency, 
524  ;  2  Smith's  Leading  Cases,  380,  note  ;  1  Parsons  on  Cont. 
67,  and  in  numerous  adjudicated  cases,  among  which  are 
Hampton  v.  iSpeckenagel,  9  S.  &  R.  212,  222  ;  11  Am.  Dec. 
704;  Layng  v.  Stewart,  1  W.  &  S.  222,  226;  McConn  v. 
Lady,  10  W.  N.  C.  493 ;  Jefts  v.  York,  10  Cush.  392 ; 
Baltzen  v.  Nicolay,  53  N.  Y.  467. 


350      AGENT  AND  THIRD  PARTY  r  CONTRACTS.     [CH.  XV. 

In  the  latter  case,  it  is  said,  the  reason  why  an  agent  is 
liable  in  damages  to  the  person  with  whom  he  contracts  when 
he  exceeds  his  authority,  is  that  the  party  dealing  with  him 
is  deprived  of  any  remedj'  upon  the  contract  against  the  prin- 
cipal. The  contract,  though  in  form  that  of  the  principal,  is 
not  his  in  fact,  and  it  is  but  just  that  the  loss  occasioned  by 
there  being  no  valid  contract  with  him  should  be  borne  bj'  the 
agent  who  contracted  for  him  without  authority.  In  Layng 
v.  Stewart,  supra,  Mr.  Justice  Huston  says  :  "  It  is  not  worth 
while  to  be  learned  on  very  plain  matters.  The  cases  cited 
show  that  if  an  agent  goes  beyond  his  authority  and  employs 
a  person,  his  principal  is  not  bound,  and  in  such  case  the 
agent  is  bound." 

The  plaintiff  in  error,  in  McConn  v.  Lady,  supra,  made  a 
contract,  believing  he  had  authority  to  do  so,  and  not  intend- 
ing to  bind  himself  personally.  The  jury  found  he  had  no 
authority  to  make  the  contract  as  agent,  and  this  court,  in 
affirming  the  judgment,  -  said :  "It  was  a  question  of  fact 
submitted  to  the  jury  whether  the  plaintiff  in  error  had  au- 
thority from  the  school  board  to  make  the  contract  as  their 
agent.  They  found  he  had  not.  He  was  personally  liable 
whether  he  made  the  contract  in  his  own  name  or  in  the 
name  of  his  alleged  principal.  It  is  a  mistake  to  suppose 
that  the  only  remedy  was  an  action  against  him  for  the  wrong. 
The  party  can  elect  to  treat  the  agent  as  a  principal  in  the 
contract." 

The  cases  in  which  agents  have  been  adjudged  liable 
personally  have  sometimes  been  classified  as  follows ;  viz. : 
(1)  Where  the  agent  makes  a  false  representation  of  his 
authority  with  intent  to  deceive.  (2)  Where,  with  the  knowl- 
edge of  his  want  of  authority,  but  without  intending  any 
fraud,  he  assumes  to  act  as  though  he  were  fully  authorized. 
(3)  Where  he  undertakes  to  act  bona  fide,  believing  he  has 
authority,  but  in  fact  has  none,  as  in  the  case  of  an  agent 
acting  under  a  forged  power  of  attorney.  As  to  cases  fairly 
brought  within  either  of  the  first  two  classes,  there  cannot  be 
any  doubt  as  to  the  personal  liability  of  the  self-constituted 


§  183.]  KROEGER  V.  PITCAIRN.  351 

agent ;  and  his  liability  may  be  enforced  either  by  an  action 
on  the  case  for  deceit,  or  by  electing  to  treat  him  as  principal. 
While  the  liability  of  agents,  in  cases  belonging  to  the  third 
class,  has  sometimes  been  doubted,  the  weight  of  authority 
appears  to  be  that  they  are  also  liable. 

In  Story  on  Agency,  the  learned  author,  recognizing  the 
undoubted  liability  of  those  belonging  to  the  first  two  classes, 
says :  "  Another  case  may  be  put  which  may  seem  to  admit 
of  some  doubt,  and  that  is  where  the  party  undertakes  to  act 
as  an  agent  for  the  principal,  bondjide,  believing  he  had  due 
authority,  and  therefore  acts  under  an  innocent  mistake.  In 
this  last  case,  however,  the  agent  is  held  b}'  law  to  be  equally 
as  responsible,  as  he  is  in  the  two  former  cases,  although 
he  is  guilty  of  no  intentional  fraud  or  moral  turpitude.  This 
whole  doctrine  proceeds  upon  a  plain  principle  of  justice  ;  for 
every  person  so  acting  for  another,  by  a  natural  if  not  bj'  a 
necessary  implication,  holds  himself  out  as  having  competent 
authority  to  do  the  act,  and  he  thereby  draws  the  other  party 
into  a  reciprocal  engagement.  If  he  has  no  such  authority 
and_flctg^OM,a  /fcfo,  still  hp  fines  a  wrong  tn  fltf  other  partyj 
andJftJEat  wrong  produces  injury  to  the  latter,  owing  to  his 
confidence  in  the  truth  of  an  express  or  implied  assertion  of 
authority  by  the  agent,  it  is  perfectly  just  that  he  who  makes 
such  assertion  should  be  personally  responsible  for  the  con- 
sequences, rather  than  that  the  injury  should  be  borne  by 
the  other  party  who  has  been  misled  by  it."  Story  on 
Agency,  §  264.  This  principle  is  sustained  by  the  authori- 
ties there  cited,  among  which  is  Smout  v.  IWery,  10  M.  & 
W.  1,  9. 

Without  pursuing  the  subject  further,  we  are  of  the  opinion 
that  upon  the  facts  established  by  the  verdict,  judgment 
should  have  been  entered  for  the  plaintiff,  on  the  question 
of  law. 

Judgment  reversed,  and  judgment  is  now  entered  in 
favor  of  the  plaintiff  for  $3,027.20,  the  amount  found  by  the 
jury,  with  interest  from  January  20,  1882,  the  date  of  the 
verdict.  Judgment  reversed. 


352      AGENT  AND  THIRD  PAETY  :   CONTRACTS.     [CH.  XV. 


§  183.]  BALTZEN  v.  NICOLAY. 

53  New  York,  467.  —  1873. 

Action  for  damages  against  an  auctioneer.  Judgment  for 
plaintiffs. 

Defendant,  without  disclosing  his  principal,  sold  stock  to 
plaintiffs.  The  principal  refused  to  perform  because  the 
stock  was  sold  at  a  price  lower  than  that  authorized.  De- 
fendant sets  up  that  the  contract  of  sale  was  void  because 
not  in  writing. 

Andrews,  J.  There  are  but  two  theories  upon  which  the 
plaintiffs  can  claim  to  recover  in  this  action.  The  one  is  that 
the  defendant,  acting  as  agent  for  Belmont  &  Co.  in  selling 
the  stock,  exceeded  his  authority  by  selling  it  below  the 
price  limited  by  them  for  the  sale.  The  other  is  that  the 
defendant  did  not  at  the  time  of  the  sale  disclose  his  princi- 
pals, and  thereby  became  bound  as  principal  upon  the  con- 
tract made.  When  an  agent  makes  a  contract  beyond  hjs 
authority,  by  which  the  principal  is  not  bound,  by  reason  of 
the  fact  that  it  was  unauthorized,  the  agent  is  liable  in  dam- 
ages to  the  person  dealing  with  him  upon  the  faith  that  _he 
possessed  the  authority  which  he  assumed.  The  ground  and 
form  of  his  liability  in  such  a  case  has  been  the  subject 
of  discussion,  and  there  are  conflicting  decisions  upon  the 
point ;  but  the  later  and  better  considered  opinion  seems 
to  be  that  his  liability,  when  the  contract  is  made  in  the 
name  of  his  principal,  rests_upon  an  implied  warranty  of 
his  authority  to  make  it,  and  the  remedy  is  by  an  action 
forjta  breach.  CoUen  v.  Wright,  8  E.  &  B.  647 ;  White 
v.  Madison,  26  N.  Y.  117 ;  Dung  v.  Parker,  52  Id.  494. 

The  reason  why  the  agent  is  liable  in  damages  to  the  per- 
8onwith_whom  he  contracts,  when  he  exceeds  his  authority, 
is  that  the  party  dealing  with  himjsjdeprived  of  anyjremedy 
upon  the  contract  against  the  principal.  The  contract, 
though  in  form  the  contract  of  the  principal,  is  not  his  in 
fact,  and  it  is  but  just  that  the  loss  occasioned  by  there  being 


5  183. J  BALTZEN  V.  NICOLAY.  353 

no  valid  contract  with  him  should  be  borne  by  the  agent  who 
contracted  for  him  without  authority.  In  order  to  make  the 
agent  liable  in  such  a  case,  however,  the  unauthorized  con- 
tract must  be  one  which  the  law  would  enforce  against  the 
principal  if  it  had  been  authorized  by  him.  Dung  v. 
Parker,  supra.  Otherwise  the  anomaly  would  exist  of  giving 
a  right  of  action  against  the  assumed  agent  for  an  unau- 
thorized representation  of  his  power  to  make  a  contract, 
when  the  breach  of  the  contract  itself,  if  he  had  been  au- 
thorized to  make  it,  would  have  furnished  no  ground  of 
action.  That  the  agent  who  makes  a  contract  for  an  undis- 
closed principal  is  personally  bound  by  it.  although  the  party 
dealing  with  him  may  know  the  general  fact  that  he  is  act.jpg 
as  agent,  is  well  settled  :  nor  does  the  fact  that  the  agentjs 
an_auctioneer.  and  that  ihfl  eontxact  arises  upon  a  sale  by 
him  as  suchT  withdraw  it  from  the  operation  of  the  rule . 
Thomson  v.  Davenport,  9  B.  &  C.  78 ;  Mills  v.  Hunt,  20 
Wend.  431. 

Applying  these  principles  to  the  case,  the  recovery  cannot 
be  upheld.  There  was  no  payment  on  account  of  the  pur- 
chase of  the  stock,  and  no  delivery ;  and  no  memorandum  in 
writing,  of  the  sale,  was  shown  to  have  been  made  b}'  the 
auctioneer.  The  plaintiffs  upon  the  case  made  must  recover, 
if  at  all,  upon  the  basis  of  the  existence  of  a  contract,  valid 
in  form,  for  the  purchase  of  the  stock.  If  the}-  rely  upon  the 
false  warranty  of  authorit}'  by  the  defendant,  then,  if  the 
contract  was  invalid  within  the  Statute  of  Frauds,  they  can 
recover  nothing,  for  in  a  legal  sense  they  have  sustained  no 
injur}- .  If  they  say  that  the  contract  was  the  personal  con- 
tract of  the  defendant,  he  has  a  right  to  interpose  the  stat- 
ute as  his  defence.  The  validity  of  the  contract,  under  the 
Statute  of  Frauds,  was  put  in  issue  by  the  pleadings.  It 
appeared  upon  the  trial  that  there  was  no  delivery  of  the 
stock,  and  that  the  purchase  money,  although  tendered,  was 
not  accepted  by  the  defendant.  The  defendant,  at  the  con- 
clusion of  the  plaintiffs'  case,  moved  to  dismiss  the  complaint 
on  the  ground  that  no  liability  had  been  shown,  and  no  valid 

23 


354      AGENT  AND  THIRD  PARTY  :   CONTRACTS.     [CH.  XV. 

contract  of  purchase  or  sale,  within  the  statute,  had  been 
proved.  The  referee  denied  the  motion  and  the  defendant 
excepted.     The  exception  was  well  taken. 

It  was  part  of  the  plaintiffs'  case  to  show  a  valid  contract  for 
the  sale  of  the  stock ;  and,  upon  objection  being  interposed 
on  the  ground  of  the  statute,  it  appearing  that  the  contract 
proved  was  within  it,  they  were  bound  to  establish  affirma- 
tively the  existence  of  an  agreement  valid  by  its  provisions. 

The  fact  that  the  law  imposes  upon  auctioneers  the  duty 
to  make  memoranda  of  sales  made  b}T  them  did  not  relieve 
the  plaintiffs  from  the  necessity,  in  this  action,  of  proving 
a  valid  contract ;  and  the  presumption  which  in  many  cases 
is  indulged,  in  favor  of  the  performance  of  official  duty,  can- 
not stand  for  proof  that  there  was  a  written  contract  of  sale 
as  against  the  defendant,  who  denies  the  fact,  and  against 
whom  the  contract  is  directly  or  indirectly  sought  to  be 
enforced. 

The  waiver,  by  the  defendant,  of  the  deposit  of  a  part  of 
the  purchase  money  required  by  the  conditions  of  sale,  pre- 
cluded him  from  alleging  the  omission  to  make  it  as  a  breach 
of  the  contract  b}T  the  plaintiffs ;  but  it  did  not  estop  him 
from  showing  that  there  was  no  actual  payment  on  the  con- 
tract, without  which  the  statute  is  not  satisfied,  where  the 
fact  of  payment  is  relied  upon  to  take  a  contract  out  of  it. 

The  judgment  should  be  reversed  and  a  new  trial  ordered, 
with  costs  to  abide  the  event. 

Rapallo,  Allen,  and  Folger,  JJ.,  concur. 

Church,  C.  J.,  Grover  and  Peckham,  JJ.,  dissent. 

Judgment  reversed. 


2.  Liability  of  agent  who  acts  for  incompetent  principal. 

§  184.]  PATTERSON  v.  LIPPINCOTT. 

47  New  Jersey  Law,  457.  — 1885. 
[Reported  herein  at  p.  21.] 


§  185.]  COMFORT  V.  GRAHAM.  355 


3.  Liability  of  agent  who  acts  for  fictitious  principal. 

§185.]  COMFORT  v.   GRAHAM. 

87  Iowa,  295.  —  1893. 

Action  for  services  rendered  as  attorney.  Judgment  for 
defendant. 

Defendant,  in  behalf  of  an  unincorporated  societ}-,  engaged 
plaintiff  to  perform  services  as  an  attorney.  The  facts 
appear  in  the  opinion. 

Kinne,  J.  ...  It  is  insisted  that,  in  making  the  contract 
with  the  plaintiff,  the  defendant  was  acting  in  a  representa- 
tive capacity  only,  and  hence  is  not  personally  liable.  It 
appears  that  the  plaintiff  was  a  member  of  the  order,  and 
knew  that  the  defendant  was  acting  in  behalf  of  the  branch 
of  the  order  in  Iowa,  of  which  he  was  then  the  head,  and  it  is 
true  that  the  defendant,  in  writing  the  plaintiff  about  the 
work  he  was  to  do,  expressed  the  hope  that  he  (plaintiff) 
"  would  consider  it  a  labor  of  love."  But  the  plaintiff  in  his 
reply  says:  "  MjT  labors  of  love  are  somewhat  extensive 
here,  but  will  do  the  best  I  can  in  part,  and  you  can  send  me 
the  balance  if  you  recover."  The  plaintiff  did  not  charge 
full  value  for  his  services.  Except  the  defendant's  naked 
statement  in  his  testimony  that  he  was  acting  in  the  matter 
in  a  representative  capacity,  we  find  no  evidence  whatever  to 
justify  the  contention  that  such  was  the  arrangement  or  under- 
standing between  the  plaintiff  and  the  defendant.  It  appears 
to  us,  also,  that  if  the  defendant  sought,  as  he  did,  to  shield 
himself  from  personal  liability  because  the  contract  for  ser- 
vices was  made  in  a  representative  capacity,  it  was  incum- 
bent on  him  to  establish  that  fact.  He  has  not  done  so.  On 
the  contrary,  we  think  it  clearly  appears  that  the  order  which 
the  defendant  claimed  to  represent  was  an  unincorporated, 
voluntary  association,  and  hence  he  represented  no  principal 
which  the  law  recognized ;  hence,  if  it  be  conceded  that  the 


356      AGENT  AND  THIRD  PARTY  :   CONTRACTS.     [CH.  XV. 

defendant  undertook  to  act  for  such  an  association,  he  is 
personally  liable.  Lewis  v.  Tilton,  64  Iowa,  220 ;  Reding 
v.  Anderson,  72  Iowa,  498. 

It  is  true  that  the  judgment  in  this  case  stands  as  the 
verdict  of  a  jury,  and  cannot  be  disturbed  if  it  finds  support 
in  the  evidence.  We  are  unable,  however,  to  see  that  the 
defendant  has  established  any  of  his  claims,  and  the  judg- 
ment must  be  Reversed.1 


4.  Rights  and  liabilities  of  agent  where  credit  is  extended 
to  him  exclusively. 

§  186.]  KELLY  v.  THUEY. 

102  Missouri,  522.  — 1890. 

Action  for  specific  performance  of  a  contract  brought  by 
James  T.  KelljT  against  defendant.     Judgment  for  plaintiff. 

The  contract  was  made  and  executed  by  defendant  and  D. 
T.  Kelly  for  the  sale  and  purchase  of  land.  Plaintiff  claimed 
to  be  the  real  party  in  interest,  and  as  such  offered  to  per- 
form the  contract,  and  demanded  a  deed.  Defendant  had  no 
knowledge  of  the  interest  of  plaintiff  in  the  contract. 

Black,  J.  .  .  .  We  must  take  this  verified  answer  as  an 
admission  that  Thuey  knew  D.  T.  Kelly  was  buying  the 
property  for  an  unnamed  person.  The  other  evidence  shows 
that  he  was  acting  for  plaintiff,  but  this  Thue}'  did  not  know. 
The  contract  was  taken  in  the  name  of  the  agent  by  the 
directions  of  the  plaintiff,  for  he  had  it  prepared.  Under  these 
circumstances  can  the  plaintiff  compel  specific  performance? 

Where,  as  here,  the  contract,  is  not  under  seal,  if  it 
can  be  gathered  from  the  whole  instrument  that  one  party 
acted  as  agent,  the  principal  will  be  bound,  or  he  may  sue 

1  See  also  In  re  Northumberland  Ave.  Hotel,  L.  R.  33  Ch.  D.  16,  ante, 
p.  39  ;  McArthur  v.  Times  Printing  Co.,  48  Minn.  31 9,  ante,  p.  42 ;  Western 
Pub.  House  v.  District  Tp.  of  Rock,  84  Iowa,  101,  ante,  p.  45. 


§  186.]  KELLY  V.  THTJEY.  357 

thereon  in  his  own  name.  Indeed,  if  the  instrument  is  so 
uncertain  in  its  terms  as  to  leave  it  in  doubt  whether  the 
principal  or  agent  is  to  be  bound,  such  uncertainty  may  he 
obviated  by  the  production  of  parol  evidence.  Hartzell  v. 
Crumb,  90  Mo.  630  :  Klostermann  v.  Loos,  58  Mo.  290. 
But  these  principles  cannot  aid  the  plaintiff  in  this  case,  for 
there  is  nothing  whatever  on  the  face  of  this  contract  to  show 
that.  T),  T    Kflly  notf>c\  ns  flgen,t  for  any  One. 

The  plaintiff  insists  that  a  much  more  comprehensive 
doctrine  should  be  applied,  and  he  refers  to  the  often  cited 
case  of  Miff  gins  v.  Senior,  8  M.  &  W.  834,  which  was  a 
contract  for  the  sale  of  goods.  The  question  presented  there 
was,  whether  the  defendant  could  discharge  himself  by  prov- 
ing that  the  agreement,  though  made  in  his  own  name,  was 
really  made  by  him  as  the  agent  of  a  third  person,  and  that 
this  was  known  to  the  plaintiff  when  the  contract  was  signed. 
M  There  is  no  doubt,"  says  the  court,  "  that,  where  such  an 
agreement  is  made,  it  is  competent  to  show  that  one  or  both 
of  the  contracting  parties  were  agents  for  other  persons,  and 
acted  as  such  agents  in  making  the  contract  so  as  to  give  the 
benefit  of  the  contract  on  the  one  hand  to,  and  charge  with 
liability  on  the  other,  the  unnamed  principal ;  and  this, 
whether  the  agreement  be  or  be  not  required  to  be  in  writing 
by  the  Statute  of  Frauds." 

Such  proof,  it  is  said,  does  not  violate  the  rule  of  law 
which  says,  parol  evidence  will  not  be  received  to  vary  the 
terms  of  a  written  contract,  because  it  only  shows  that  the 
agreement  binds  another  person  b}'  reason  of  the  act  of 
the  agent  in  signing  the  agreement  pursuant  to  his  authority. 
The  doctrine  of  that  case  has  been  quoted  with  approval  by 
this  court  on  two  occasions.  Briggs  v.  Munchon,  56  Mo. 
467  ;  Higgins  v.  Dellinger,  22  Mo.  397.  The  following,  and 
many  other  authorities,  are  to  the  same  effect:  Story  on 
Agency  (9th  ed.),  sec.  160  a;  Whart.  on  Agents,  sec.  403; 
Fry  on  Spec.  Perf.  sec.  148  ;  Huntington  v.  Knox,  7  Cush. 
371 ;  Briggs  v.  Partridge,  64  N.  Y.  357. 

This  broad  doctrine,  that,  when  an  agent  makes  a  contract 


358      AGENT  AND  THIRD  PARTY  :   CONTRACTS.     [CH.  XV. 

in  his  own  name  only,  the  known  or  unknown  principal  may 
sue  or  be  sued  thereon,  may  be  applied  in  many  oasps  wijji 
safety^  and  especially  in  cases  of  informal  commercial  con- 
tracts. But  it  is  certain  that  i^jaj^Q^be^j^jlgdv^here 
exclusive  credit  is  given  to  the  agentyuad  it  is  intended  by 
both  parties  that  no  resort  shall  be~had  by  or  against  the 
principal  (Story  on  Agency,  sec.  160  a),  nor  does  it  apply  to 
those  cases  where  skill,  solvency,  or  any  personal  quality  <jf 
one  of  the  parties  to  the  contract  is  a  material  ingredient  in 
it Fry  on  Spec.  Perf.  sec.  149. 

Now,  in  this  case,  the  written  contract  is  full,  complete. 
and  formal.  It  expresses  just  what  the  parties  thereto 
intended  It  fttionH  ^TTfifi  The  plaintiff  had  it  prepared, 
and  must  be  taken  to  have  directed  it  to  be  made  in  the  name 
of  D.  T.  Kelly  and  not  in  his  own  name.  In  short,  the  contract 
is  one  between  Thuey  and  D.  T.  Kelly,  and  was  so  intended 
by  all  the  parties.  It  contains  agreements  to  be  performed 
by  both  parties,.  Thuey  agreed  to  sell  the  land  to  D.  T. 
Kelly,  and  agreed  to  take  the  latter's  notes  and  deed  of  trust 
for  the  deferred  payments^  He  did  not  agree  to  take  the 
notes  and  deed  of  trust  of  the  plaintiff  for  the  deferred 
payments.  To  admit  parol  evidence  to  show  that  D.  T. 
Kelly  acted  as  an  agent  of  the  plaintiff,  and  then  substitute, 
or  add,  the  plaintiff  as  a  party,  is  simply  to  make  a  new^gon- 
tract  for  the  parties.  To  say  that  the  admission  of  such 
evidence  does  not  alter  the  written  contract,  in  a  case  like 
the  one  in  hand,  is  a  doctrine  too  subtle  and  refined  to  be 
comprehended.  D.  T.  Kelly  contracted  for  the  warranty 
deed  of  Thuey,  and  he  is  entitled  to  Thuey's  covenant  of 
warrant}',  and  could  not  be  required  to  take  the  covenants 
of  some  person  to  whom  Thuey  should  sell  the  property. 
Steiner  v.  Zwickey,  43  N.  W.  Rep.  376. 

So,  on  the  other  hand,  Thuey  contracted  for,  and  is  entitled 
to  have,  the  notes  and  deed  of  trust  of  D.  T.  Kelly,  and  he 
cannot  be  compelled  to  take  the  notes  of  another  person. 
Whatever  the  rights  may  be  as  between  the  Kellys,  the 
plaintiff  is  not  a  party  to  the  contract  with  Thuey,  and  he 


§  187.]  KAULBACK  V.   CHURCHILL.  359 

cannot  enforce  specific  performance  of  it,  and  thereby  compel 
Thuey  to  accept  his  obligations  for  the  deferred  payments. 

The  right  to  enforce  specific  performance  of  this  contract 
exists  in  D.  T.  Kelly,  and  notjhe  plaintiff.  D.  T.  Kelly 
must  make  the  note  and  deed  of  trust,  and  to  that  end  the 
title  must  be  vested  in  him,  and  he  is,  therefore,  a  necessary 
and  indispensable  part3'  to  this  suit. 

The  judgment  is,  therefore,  reversed  and  the  cause  re- 
manded.    All  concur. 


5.    Liability  of  agent  who  acts  for  a  foreign  principal. 
§187.]  KAULBACK  v.  CHURCHILL. 

59  New  Hampshire,  296.  —  1879. 

Assumpsit,  for  apples  sold  and  delivered.  The  defendant, 
residing  in  this  State,  was  the  agent  of  A.  &  O.  W.  Mead 
&  Co.,  a  firm  doing  business  in  Boston,  and  all  its  members 
resident  in  Massachusetts.  At  the  time  of  the  sale  of  the 
apples,  the  plaintiff  was  informed  and  knew  that  the  defend- 
ant was  acting  as  agent  of  the  firm.  A  referee  found  for 
the  defendant. 

Clark,  J.  "  If  a  duly  authorized  agent  uses  such  terms 
as  legally  import  an  undertaking  by  the  principal  only,  the 
contract  is  that  of  the  principal,  and  he  alone  is  the  party  by 
whom  it  is  to  be  performed."  Met.  on  Cont.  106.  Whether 
the  defendant  assumed  a  personal  liability  in  making  the  eon- 
tract  is  a  question  of  fact,  which  has  been  determined  by  the 
finding  of  the  referee.  JSToyes  v.  Patrick,  58  N.  H.  618. 
The  fact  that  the  firm  of  A.  &  O.  W.  Mead  were  residents  of 
Massachusetts,  doing  business  there,  is  not  of  itself  a  ground 
for  holding  the  defendant  personalby  liable.  "  The  present 
doctrine  is,  that  when  the  terms  of  a  contract  made  by  an 
agent  are  clear,  they  are  to  have  the  same  construction  and 
legal  effect,  whether  made  for  a  domestic  or  for  a  foreign 
principal."     Met.   on   Cont.  111.    The  statement  Gited  by 


360      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

the  plaintiff  from  Story,  Agency,  sec.  268,  is  not  now  recog- 
nized as  the  law,  excepting,  perhaps,  in  Maine  and  Louisiana. 
Met.  on  Cont.  Ill  ;  Bray  v.  ITettell,  1  Allen,  80;  Kirkpat- 
rick  v.  Stanier,  22  "Wend.  244 ;  Oelricks  v.  Ford,  23  How. 
49.  Judgment  for  the  defendant. 


6.     Liability  of  agent  who  contracts  in  his  own  name  in  an 
instrument  under  seal. 

§  188.]  BRIGGS  v.  PARTRIDGE. 

64  New  York,  357.  —  1876. 
[Reported  herein  at  p.  248.] 


7.     Liability  of  an  agent  who  contracts  in  his  own  name  in 
a  negotiable  instrument. 

a.     Construction  from  signature  alone. 

§  190.]        RENDELL  v.   HARR1MAN  et  al. 
75  Maine,  497. —1883. 

Assumpsit  upon  the  following  promissory  note. 

The  plea  was  the  general  issue  with  brief  statement  that 
the  instrument  declared  on  was  the  note  of  the  Prospect  and 
Stockton  Cheese  Company. 

[Note.] 

$246.50  Stockton,  October  19, 1878. 

For  value  received,  we  promise  to  pay  S.  A.  Rendell,  or 
order,  two  hundred  forty-six  and  fifty  one-hundreths  dollars, 
in  one  year  from  date,  with  interest. 

Otis  Harriman,  ^  President. 

R.  M.  Trevett,    1    .  Directors  of 

L.  Mddgett,  Prospect  and  Stockton 

W.  H.  Ginn,        J       Cheese  Company. 


§  190.]  EENDELL  V.  HAKMMAET.  361 

Defendants  offered  to  show  that  they  signed  the  above 
Instrument  as  duly  authorized  agents  of  the  Prospect  and 
Stockton  Cheese  Compan}* ;  that  plaintiff  knew  that  fact 
when  he  accepted  the  note ;  that  a  payment  had  been  made 
thereon  by  the  company  and  receipted  for  by  plaintiff;  and 
that  the  note  was  for  a  balance  due  plaintiff  for  machinery 
purchased  by  the  company  from  plaintiff  and  paid  for  by  the 
company  save  for  this  balance.  If  this  evidence  is  admissible 
the  action  is  to  stand  for  trial ;  otherwise  defendants  are  to 
be  defaulted. 

Danforth,  J.  All  the  questions  which  have  been  or  can 
be  raised  in  this  case  growing  out  of  the  common  law,  as 
well  the  purpose  and  effect  of  R.  S.  c.  73,  §  15,  were  raised 
and  fully  discussed  and  settled  in  Sturdivant  v.  Hull,  59 
Me.  172.  A  case  so  well  considered  and  so  fully  sustained 
by  the  authorities  as  that  would  seem  to  be  decisive  of  all 
the  questions  involved  and  would  undoubtedly  have  been  so 
considered,  but  for  a  hope  raised  by  what  is  claimed  "  as  a 
modification  of  the  rule  established  by  it,  in  Simpson  v. 
Garland,  72  Me.  40,  following  a  more  liberal  construction 
of  the  statute  in  Nobleborc?  v.  Clark,  68  Me.  87."  But 
upon  a  review  of  Sturdivant  v.  Hull,  we  see  no  occasion  to 
depart  from  its  teachings,  nor  do  we  perceive  any  modifica- 
tion of  its  doctrine  in  any  case  which  follows.  On  the 
other  hand,  Mellen  v.  Moore,  68  Me.  390,  "  is  exclusively 
based  "  upon  it ;  it  is  referred  to  as  authoritj'  in  Nobleboro?  v. 
Clark,  and  is  followed  in  the  still  later  case  of  Boss  v. 
Brown,  74  Me.  352 ;  nor  do  we  find  anything  inconsistent 
with  it  in  Simpson  v.  Garland.  In  the  latter  case  the  note 
contained  language  purporting  to  show  that  the  promise  was 
that  of  the  principal  and  which  the  court  held  did  show  it ; 
while  in  Sturdivant  v.  Hull,  no  such  language  is  used. 
True,  in  the  case  of  Boss  v.  Brown,  it  is  suggested  that  it 
does  not  appear  that  the  maker  of  the  note  had  any  authority 
to  bind  the  town ;  but  from  the  opinion  it  clearly  appears 
that  the  liability  is  fixed  upon  the  agent  by  force  of  the  terms 
of  the  contract  and  not  by  any  extraneous  evidence,  or  the 
want  of  it.    In  Noblehoro1  v.  Clark,  the  contract  was  set  up 


862      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

as  binding  upon  the  principal,  and  was  so  held  because  by  its 
terms  it  appeared  that  such  was  the  intention  of  the  agent, 
and  such  being  the  intention,  it  was  necessary  with  or  with- 
out the  statute  to  show  the  authority  of  the  agent  before  the 
contract  could  be  regarded  as  that  of  the  principal.  The 
action  at  bar  is  against  the  alleged  agents,  and  as  suggested 
in  Sturdivant  v.  Hull,  whatever  may  be  the  effect  of  the 
statute  in  "  extending  a  liability  to  the  real  party  in  interest 
and  affording  a  remedy  against  him,  it  cannot  be  so  con- 
strued as  to  discharge  one  who,  for  a  sufficient  consideration, 
has  expressly  assumed  a  liability  b}'  means  of  a  written  con- 
tract, or  to  allow  proof  aliunde  for  that  purpose."  Nor  do 
we  find  any  case  at  common  law  to  go  so  far.  All  the 
authorities,  including  those  cited  bj'  the  defendant  in  this 
case,  concur  in  holding  that  the  liability  of  the  one  party  or 
the  other  must  be  ascertained  from  the  terms  of  the  written 
instrument,  and  parol  proof  cannot  be  received  to  vary  or 
control  such  terms. 

That  an  agent  may  make  himself  responsible  for  his  prin- 
cipal's debt  is  beyond  doubt.  That  the  defendants  in  this 
case  have  done  so  by  the  terms  of  the  note  in  suit,  uncon- 
trolled b}*  extraneous  evidence,  is  settled  by  the  uniform 
decisions  in  this  State,  supported,  as  shown  in  Sturdivant  v. 
Hull,  by  the  weight  of  reason,  as  well  as  of  authority 
elsewhere. 

The  evidence,  then,  offered,  if  admitted,  would  not  avail 
the  defendants  unless  it  had  the  effect  to  discharge  them  from 
a  contract  into  which  they  have  entered. 

It  is  true,  that  in  the  cases  cited,  such  evidence  was 
admitted  and  was  perhaps  admissible,  under  the  well  estab- 
lished rule  of  law,  that  when  there  is  an  ambiguity  in  the 
contract,  when  the  language  used  is  equally  susceptible  of 
two  different  constructions,  evidence  of  the  circumstances  by 
which  the  pai'ties  were  surrounded  and  under  which  the 
contract  was  made  may  be  given,  not  for  the  purpose  of 
proving  the  intention  of  the  parties  independent  of  the  writ- 
ing, but  that  the  intention  may  be  more  intelligently  ascer- 
tained from  its  terms.    But  to  make  this  evidence  admissible 


§  191.]         BBADLEE  V.   BOSTON  GLASS  FACTOBY.        363 

some  ambiguity  must  first  appear ;  there  must  be  language 
used  such  as  may,  without  doing  violence  to  its  meaning,  be 
explained  consistently  with  the  liability  of  either  party,  some 
language  which,  as  in  Simpson  v.  Garland,  tends,  in  the 
words  of  the  statute,  to  show  that  the  contract  was  made  by 
the  agent  "  in  the  name  of  the  principal,  or  in  his  own  name 
for  his  principal." 

In  this  case  no  such  ambiguity  exists,  no  such  language  is 
used.  The  promise  is  that  of  the  defendants  alone  without 
anything  to  indicate  that  it  was  for  or  in  behalf  of  another. 
True,  the  defendants  affixed  to  their  names  their  official  title, 
with  the  name  of  the  corporation  in  which  they  held  office, 
but  nothing  whatever  to  qualify  their  promise  or  in  the  slight- 
est degree  to  show  it  other  than  their  own.  The  statute  as 
well  as  the  decisions,  with  few  exceptions,  as  we  have  seen, 
requires  more  than  this  to  make  the  testimony  admissible. 
Bray  v.  Kettell,  1  Allen,  80. 

Defendants  defaulted  for  the  amount  of  the  note  and 
interest. 


b.     Construction  from  signature  aided  by  recitals  in  the 
instrument. 

§191.]       BRADLEE  v.   BOSTON  GLASS  MANU- 
FACTORY. 

16  Pickering  (Mass.),  347.  — 1835. 
Assumpsit  on  the  following  promissory  note  :  — 

Boston,  13th  January,  1823. 
For  value  received,  we,  the  subscribers,  jointly  and  severally, 
promise  to  pay  Messrs.  J.  and  T.  Bradlee  or  order,  for  the 
Boston  Glass  Manufactory,  thirty-five  hundred  dollars,  on 
demand,  with  interest. 

Jonathan  Hunnewell, 
Samuel  Gore, 
Charles  F.  Kupfer. 

Thirty  days'  notice  shall  be  given  before  payment  of  this 
note,  by  either  side. 


364      AGENT  AND  THIBD  PARTY :   CONTRACTS.     [CH.  XV. 

Plaintiffs  loaned  the  company  $3,500,  for  which  they  re- 
ceived the  note  of  the  company,  signed  by  Kupfer  as  treasurer, 
and* by  Hunnewell  and  Gore  as  sureties.  That  note  was  can- 
celled and  this  note  given  in  its  stead.  The  company  continued 
to  pa}*  the  interest  on  this  note.  Plaintiffs  have  already  re- 
covered a  judgment  against  Hunnewell,  Gore,  and  Kupfer  on 
this  note,  and  issued  a  body  execution  thereon  against 
Hunnewell,  and  covenanted  with  Gore,  upon  his  payment  of 
one  third  of  the  judgment,  not  to  proceed  further  against 
him. 

Shaw,  C.  J.,  delivered  the  opinion  of  the  court 
The  first  question  which  arises  here  is,  whether  this  was  the 
promissory  note  of  the  Boston  Glass  Manufactory,  or  of  the 
individuals  who  signed  it.  It  is  not  now  contended  that  a 
corporation  may  not  give  a  promissory  note  by  its  agents, 
and  is  not  to  be  treated,  in  this  respect,  like  a  natural  person. 
The  main  question  in  the  present  case  arises  from  the  form  of 
the  contract ;  and  the  question  is,  whether  in  this  form  it  binds 
the  persons  who  signed  it,  or  the  company  for  whose  use  the 
money  was  borrowed.  As  the  forms  of  words  in  which  con- 
tracts may  be  made  and  executed  are  almost  infinitely  various, 
the  test  question  is,  whether  the  person  signing  professes  and 
intends  to  bind  himself,  and  adds  the  name  of  another  to 
indicate  the  capacity  or  trust  in  which  he  acts,  or  the  person 
for  whose  account  his  promise  is  made  ;  or  whether  the  words 
referring  to  a  principal  are  intended  to  indicate  that  he  does 
a  mere  ministerial  act  in  giving  effect  and  authenticity  to 
the  act,  promise,  and  contract  of  another.  Does  the  person 
signing  apply  the  executing  hand  as  the  instrument  of  another, 
or  the  promising  and  engaging  mind  of  a  contracting  party  ? 
It  is  held  in  man}*  cases,  that  although  the  contract  of  one  is 
given  for  the  debt  of  another,  and  although  it  is  understood 
between  the  person  promising  and  the  party  for  whom  the 
contract  is  entered  into,  that  the  latter  is  to  pay  it,  or  to 
reimburse  and  indemnify  the  contracting  part}',  if  he  should 
be  required  to  pay  it,  it  is  still,  as  between  the  parties  to  it, 
the  contract  of  the  party  making  it.  A  leading  and  decisive 
case  on  this  point  is  Stackpole  v.  Arnold,  11  Mass.  R.  27. 


§  191.]      BRADLEE  V.   BOSTON  GLASS  FACTORY.  365 

With  these  views  as  to  what  the  question  is,  and  the 
grounds  on  which  it  is  to  be  considered,  we  are  of  opinion 
that  this  was  the  promissory  note  and  obligation  of  the  three 
makers,  and  not  of  the  company. 

The  words,  "  for  the  Boston  Glass  Manufactory, "  if  they 
stood  alone,  would  perhaps  leave  it  doubtful  and  ambiguous, 
whether  they  meant  to  bind  themselves  as  promisors  to  pay 
the  debt  of  the  company,  or  whether  they  meant  to  sign  a 
contract  for  the  company,  by  which  they  should  be  bound  to 
pay  their  own  debt ;  though  the  place  in  which  the  words  are 
introduced  would  rather  seem  to  warrant  the  former  con- 
struction. 

But  other  considerations  arise  from  other  views  of  the 
whole  tenor  of  the  note.  The  fact  is  of  importance  that  it  is 
signed  b}'  three  instead  of  one,  and  with  no  designation  or 
name  of  office,  indicating  any  agency  or  connection  with  the 
company.  No  indication  appears  on  the  note  itself  that  either 
of  them  was  president,  treasurer,  or  director,  or  that  the}* 
were  a  committee  to  act  for  the  company.  But  the  words 
-'jointly  and  severally"  are  quite  decisive.  The  persons  are 
"  we,  the  subscribers,"  and  it  is  signed  Jonathan  Hunnewell, 
Samuel  Gore,  and  Charles  F.  Kupfer.  This  word,"  severally  " 
must  have  its  effect ;  and  its  legal  effect  was  to  bind  each  of 
the  signers.  This  fixes  the  undertaking  as  a  personal  one. 
It  would  be  a  forced  and  wholly  untenable  construction  to 
hold,  that  the  company  and  signers  were  all  bound ;  this 
would  be  equally  inconsistent  with  the  terms  and  the  obvious 
meaning  of  the  contract. 

If  we  go  out  of  the  contract  itself,  and  look  at  the  relation 
in  which  the  parties  stood  to  each  other,  with  the  view  of 
giving  effect  to  the  language  of  their  contract  for  one  purpose, 
we  must  for  another.  It  is  a  circumstance  relied  on  for  the 
plaintiffs  with  some  confidence,  that  the  money  was  originally 
borrowed  for  the  company,  that  the  note  was  entered  on  the 
books  as  the  debt  of  the  company,  and  that  the  interest  was 
paid  by  them.  But  it  further  appears  that  from  1814  to  1823 
these  promisees  held  the  note  of  the  company,  guaranteed  by 


366   AGENT  AND  THIRD  PARTY :  CONTRACTS.  [CH.  XV. 

two  of  these  promisors,  Gore  and  Hunnewell,  the  other, 
Kupfer,  having  signed  it  as  treasurer,  which  did  not  render  him 
personally  liable,  and  that  at  that  time  all  the  parties  were  in 
good  credit.  Now  upon  the  plaintiffs'  hypothesis,  they  must 
have  voluntarily  relinquished  the  liabilit}'  of  two  responsible 
guarantors,  retaining  the  liability  of  the  company  only,  and 
that  for  a  large  debt,  which,  from  the  clause  providing  for  a 
mutual  notice  of  thirty  dajs,  seems  intended  to  have  been  a 
kind  of  permanent  loan.  But  upon  the  other  hypothesis  they 
retained  the  names  of  two  responsible  persons,  and  that  in 
the  more  direct  and  unquestionable  form  of  joint  and  several 
promisors,  together  with  the  name  of  another  responsible 
person  as  promisor,  in  lieu  of  that  of  the  company. 

•  •••••• 

Plaintiffs  non-suit. 


§191.]  FRANKLAND  v.  JOHNSON. 

147  Illinois,  520.  — 1893. 
Assumpsit  upon  the  following  instrument :  — 

$5,592.00.  Chicago,  June  1,  1885. 

On  or  before  the  first  day  of  June,  1888,  the  Western  Sea- 
man's Friend  Society  agrees  to  paj-  to  L.  M.  Johnson,  or  order, 
the  sum  of  five  thousand  five  hundred  and  ninety-two  dollars, 
with  interest  at  the  rate  of  six  per  cent  per  annum. 

B.  Frankland,  Gen.  Sup't. 

Judgment  was  given  for  the  plaintiff,  and  the  defendant 
(Franklin)  appeals. 

Mr.  Justice  Wilkins.  .  .  .  The  writing  on  its  face  is  not 
distinctly  the  note  of  Frankland.  A  personal  note  by  him, 
in  proper  form,  would  have  used  the  personal  pronoun  "  I," 
instead  of  the  name  of  the  corporation,  and  would  have  been 
signed  without  the  designation  "  Gen.  Sup't."  Neither  is  it, 
b)r  its  terms,  the  note  of  a  corporation.  As  such,  it  should 
have  been  been  signed  with  the  name  of  the  corporation,  by 
its  president,  secretary,  or  other  officers  authorized  to  execute 


§  191.]  FRANKLAND  V.  JOHNSON.  367 

it,  or,  as  in  Scanlan  v.  Keith,  102  111.  634,  by  the  proper 
officers  designating  themselves  officers  of  the  corporation  for 
which  the}*  assumed  to  act,  or,  as  in  New  Market  Savings  Bank 
v.  Gillet,  100  111.  254,  using  the  corporate  name  both  in  the 
bodj*  of  the  note  and  in  the  signatures  to  it. 

But  if  it  be  conceded  that,  prima  facie,  a  general  superin- 
tendent of  a  corporation  has  authority  to  make  promissory 
notes  in  its  name,  and  this  instrument  be  held  to  appear,  on 
its  face,  to  be  the  obligation  of  the  society,  rather  than  of 
Frankland,  certainly  it  could  not  even  then  be  contended 
that  it  was  conclusively  so.  It  is  well  understood  that  if  the 
agent,  either  of  a  corporation  or  an  individual,  makes  a  con- 
tract which  he  has  no  authority  to  make,  he  binds  himself 
personally,  according  to  the  terms  of  the  contract.  Angell  & 
Ames  on  Corp.  sec.  303.  It  was  said  by  Sutherland,  J.,  in 
Mott  v.  Hicks,  1  Cow.  573  (13  A.  D.  556)  :  "  It  is  perfectly 
well  settled  that  if  a  person  undertake  to  contract,  as  agent, 
for  an  individual  or  corporation,  and  contracts  in  a  manner 
which  is  not  legally  binding  upon  his  principal,  he  is  person- 
ally responsible  (citing  authorities).  And  the  agent,  when 
sued  upon  such  a  contract,  can  exonerate  himself  from  per- 
sonal liability  only  by  showing  his  authority  to  bind  those  for 
whom  he  has  undertaken  to  act  It  is  not  for  the  plaintiff  to 
show  that  he  had  not  authority.  The  defendant  must  show, 
affirmatively,  that  he  had."  *  This  rule  is  quoted  with  ap- 
proval in  Wheeler  v.  Reed  et  al,  36  111.  81. 

This  action  is  against  Frankland,  individually.  The  note 
is  declared  upon  as  his  personal  promise  to  pay.  The  Question, 
then,  as  to  whether  it  is  his  contract  or  that  of  the  Western 
Seaman's  Friend  Society,  is  one  of  fact,  and  so  it  was  treated 
on  the  trial.  Both  parties  went  full}'  into  the  facts  and  cir- 
cumstances leading  to  and  attending  the  making  of  the  note. 
So  far  from  showing  affirmatively  that  appellant  had  author- 
ity to  make  the  note  so  as  to  bind  the  corporation,  the  evidence 
strongly  tends  to  show  the  contrary,  and  that  it  was  the  inten- 

1  But  see  Baltzen  v.  Nicoilay,  ante,  p.  352.  The  decision  may  be  ap- 
proved without  assenting  to  this  line  of  argument. 


368      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

tion  of  the  parties  that  he  should  be  individually  responsible. 
No  record  proceedings  whatever,  on  the  part  of  the  corpora- 
tion, pertaining  to  appellant's  transactions  with  appellee  or 
her  husband,  were  shown.  It  is  clear  that  if  suit  had  been 
against  the  societ}7  there  could  have  been  no  recovery  on  the 
evidence  in  this  record.  At  all  events,  the  facts  have  been 
settled  adversely  to  appellant,  and  are  not  open  to  review  in 
this  court. 

The  propositions  submitted  to  the  trial  court  by  appellant, 
to  be  held  as  law  applicable  to  the  case,  are  mainly  requests 
to  hold  certain  facts  to  have  been  proved,  and,  under  the 
evidence,  the}'  were  all  properly  refused.  In  fact,  nc  argu- 
ment is  made  in  support  of  them.  There  is  but  one  theory 
on  which  the  judgment  below  could  be  reversed  by  this  court, 
and  that  is,  that  the  note  sued  on  must  be  held  to  be  the  con- 
tract of  the  corporation,  absolutely  and  conclusively,  and  all 
parol  proof  tending  to  establish  appellant's  liability,  was  in- 
competent, and  that  theory  is  clearly  untenable. 

As  to  the  judgment  on  the  attachment,  it  is  only  necessary 
to  say  that  the  evidence  at  least  tended  to  support  the  allega- 
tions of  the  original  affidavit,  and  the  judgment  of  affirmance 
in  the  Appellate  Court  is  conclusive. 

The  judgment  of  the  Appellate  Court  will  be  affirmed. 

Judgment  affirmed. 


§  192.]     mechanics'  bank  v.  Columbia  bank.    369 

c.    Construction  from  signature  aided  by  marginal  headings 
or  memoranda. 

§192.]      MECHANICS'  BANK  OF  ALEXANDRIA 
v.  THE  BANK  OF  COLUMBIA. 

5  Wheaton  (U.  S.),  326.  — 1820.  \ 

Assumpsit  on  the  following  check :  — 


No.  18. 

Mechanics'  Bank  of  Alexandria. 

June  25,  1817. 
Cashier  of  the  Bank  of  Columbia, 

Pay  to  the  order  of  P.  H.  Minor,  Esq.,  Ten 
Thousand  Dollars. 

Wm.  Paton,  Jr. 
$10,000. 


Paton  was  cashier  and  Minor  teller  of  the  Mechanics' 
Bank.  Minor  turned  over  the  check  to  the  Bank  of  the 
United  States  in  payment  of  a  balance  due  that  bank  by  the 
Mechanics'  Bank.  The  Bank  of  the  United  States  presented 
the  check  to  the  Bank  of  Columbia,  which  paid  it  and 
charged  it  to  the  account  of  the  Mechanics'  Bank,  treating  it 
as  the  check  of  the  latter  bank.  The  Mechanics'  Bank  con- 
tended that  the  check  was  Paton's  private  obligation ;  that 
it  bought  it  for  value ;  that  he  had  funds  in  the  Bank  of 
Columbia  to  meet  it ;  and  that  it  should  be  charged  to  his  ac- 
count. The  court  heard  parol  evidence  to  establish  the 
official  character  of  the  check,  and  gave  judgment  for  the 
plaintiff.  Defendant  objected  to  this  evidence  and  requested 
a  charge  that  the  check  was  on  its  face  a  private  check  of 
Paton's,  which  charge  was  refused. 

24 


370      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

Mr.  Justice  Johnson.  .  .  .  The  only  ground  on  which 
it  can  be  contended  that  this  check  was  a  private  check,  is, 
that  it  had  not  below  the  name  the  letters  Cas.  or  Ca.  But 
the  fallacy  of  the  proposition  will  at  once  appear  from  the 
consideration,  that  the  consequence  would  be,  that  all  Paton's 
checks  must  have  been  adjudged  private.  For  no  definite 
meaning  could  be  attached  to  the  addition  of  those  letters 
without  the  aid  of  parol  testimony. 

But  the  fact  that  this  appeared  on  its  face  to  be  a  private 
check  is  by  no  means  to  be  conceded.  On  the  contrary,  the 
appearance  of  the  corporate  name  of  the  institution  on  the 
face  of  the  paper,  at  once  leads  to  the  belief  that  it  is  a  cor- 
porate, and  not  an  individual  transaction :  to  which  must  be 
added  the  circumstances,  that  the  cashier  is  the  drawer,  and 
the  teller  the  payee ;  and  the  form  of  ordinary  checks  de- 
viated from  by  the  substitution  of  to  order,  for  to  bearer. 
The  evidence,  therefore,  on  the  face  of  the  bill  predominates 
in  favor  of  its  being  a  bank  transaction.  Applying,  then, 
the  plaintiffs  own  principle  to  the  case,  and  the  restriction 
as  to  the  production  of  parol  or  extrinsic  evidence  could  have 
been  only  applicable  to  himself.  But  it  is  enough  for  the 
purposes  of  the  defendant  to  establish,  that  there  existed,  on 
the  face  of  the  paper,  circumstances  from  which  it  might 
reasonably  be  inferred,  that  it  was  either  one  or  the  other. 
In  that  case,  it  became  indispensable  to  resort  to  extrinsic 
evidence  to  remove  the  doubt.  The  evidence  resorted  to  for 
this  purpose  was  the  most  obvious  and  reasonable  possible, 
viz.,  that  this  was  the  appropriate  form  of  an  official  check ; 
that  it  was,  in  fact,  cut  out  of  the  official  check-book  of  the 
bank,  and  noted  on  the  margin ;  that  the  money  was  drawn 
in  behalf  of,  and  applied  to  the  use  of  the  Mechanics'  Bank ; 
and  by  all  the  banks,  and  all  the  officers  of  the  banks  through 
which  it  passed,  recognized  as  an  official  transaction.  It  is 
true,  it  was  in  evidence  that  this  check  was  credited  to 
Paton's  own  account  on  the  books  of  his  bank.  But  it  was 
done  by  his  own  order,  and  with  the  evidence  before  their 
eyes  that  it  was  officially  drawn.     This  would  never  have 


§  192.]  HITCHCOCK   V.  BUCHANAN.  371 

been  sanctioned  by  the  directors,  unless  for  reasons  which 
they  best  understood,  and  on  account  of  debits  which  they 
only  could  explain. 

It  is  by  no  means  true,  as  was  contended  in  argument, 
that  the  acts  of  agents  derive  their  validity  from  profess- 
ing, on  the  face  of  them,  to  have  been  done  in  the  exercise  of 
their  agency.  In  the  more  solemn  exercise  of  derivative 
powers,  as  applied  to  the  execution  of  instruments  known  to 
the  common-law,  rules  of  form  have  been  prescribed.  But 
in  the  diversified  exercise  of  the  duties  of  a  general  agent,  the 
liability  of  the  principal  depends  upon  the  facts :  (1)  That 
the  act  was  done  in  the  exercise,  and,  (2)  Within  the  limits 
of  the  powers  delegated.  These  facts  are  necessarily  inquir- 
able  into  by  a  court  and  jury ;  and  this  inquiry  is  not  con- 
fined to  written  instruments,  (to  which  alone  the  principle 
contended  for  could  apply),  but  to  any  act  with  or  with- 
out writing,  within  the  scope  of  the  power  or  confidence 
reposed  in  the  agent ;  as,  for  instance,  in  the  case  of  money 
credited  in  the  books  of  a  teller,  or  proved  to  have  been  de- 
posited with  him,  though  he  omits  to  credit  it. 

Judgment  affirmed. 


§192.]  HITCHCOCK  v.  BUCHANAN. 

105  United  States,  416.  — 1881. 

This  was  an  action  of  assumpsit  by  Hitchcock  as  indorsee, 

against  Buchanan  and  Waugh  as  drawers,  of  the  following 

bill  of  exchange :  — 

Office  of  Belleville  Nail  Mill  Co., 
$5,477.13.  Belleville,  III.,  Dec.  15,  1875. 

Four  months  after  date,  pay  to  the  order  of  John  Stevens, 
Jr.,  cashier,  fifty-four  hundred  and  seventy-seven  Jfo  dollars, 
value  received,  and  charge  same  to  account  of  Belleville  Nail 
Mill  Co. 

Wm.  C.  Buchanan,  Pres't. 

James  C.  Waugh,  Sec'y. 

To  J.  H.  Pieper,  Treas.,  Belleville,  Illinois. 


372      AGENT  AND  THIRD  PARTY  :   CONTRACTS.     [CH.  XV. 

Demurrer  to  a  declaration  against  the  defendants  as 
drawers  of  the  bill  was  sustained,  and  judgment  given  for 
the  defendants,  on  the  ground  that  the  instrument  was  the 
bill  of  the  Belleville  Nail  Mill  Company,  and  not  the  bill  of 
the  defendants. 

Mr.  Justice  Gray,  after  stating  the  case,  delivered  the 
opinion  of  the  court. 

The  bill  of  exchange  declared  on  is  manifest^  the  draft  of 
the  Belleville  Nail  Mill  Company,  and  not  of  the  individuals 
by  whose  hands  it  is  subscribed.  It  purports  to  be  made 
at  the  office  of  the  companj',  and  directs  the  drawee  to  charge 
the  amount  thereof  to  the  account  of  the  company,  of  which 
the  signers  describe  themselves  as  president  and  secretary. 
An  instrument  bearing  on  its  face  all  these  signs  of  being 
the  contract  of  the  principal  cannot  be  held  to  bind  the 
agents  personally.  Sayre  v.  Nichols,  7  Cal.  535  ;  Carpenter 
v.  Farnsworth,  106  Mass.  561,  and  cases  there  cited. 

The  allegation  in  the  declaration,  that  the  defendants  made 
"their"  bill  of  exchange,  is  inconsistent  with  the  terms  of 
the  writing  sued  on  and  made  part  of  the  record,  and  is  not 
admitted  bj*  the  demurrer.  Dillon  v.  Barnard,  21  Wall. 
430 ;  Binz  v.  Tyler,  79  111.  248. 

The  provision  of  the  statute  of  Illinois  (ed.  1877,  title 
Practice,  sees.  34,  36)  prohibiting  defendants  sued  on 
written  instruments  from  denying  their  signatures,  except 
under  plea  verified  by  affidavit,  has  no  application  where  the 
fact  of  signature  is  admitted  by  demurrer,  and  the  only  issue 
is  one  of  law. 

Judgment  affirmed. 


§  192.] 


CHIPMAN  V.   FOSTER. 


373 


§  192.]  CHIPMAN  v.   FOSTER  et  al. 

119  Massachusetts,  189. —  1875. 

Contract  against  the  defendants  as  drawers  of  three  drafts 
indorsed  in  blank  by  the  payees,  of  which  the  following  is 
a  copy :  — 

No.  176.  $5,000. 

New  England  Agency  of   the   Pennsylvania 
Fiee  Insurance  Company,  Philadelphia. 

Boston,  August  18,  1873. 
Pay  to  the  order  of  Haley,  Morse,  &  Com- 
pany, five  thousand  dollars,  being  in  full  of  all 
claims  and  demands  against  said  company 
for  loss  and  damage  b}'  fire  on  the  30th  day  of 
May,  1873,  to  property  insured  under  policy 
No.  824,  of  Boston,  Mass.,  agency. 

Foster  &  Cole. 


Foster  &  Cole, 
General  Agents 

for  the 
New  England 

States, 

15  Devonshire 

Street, 

Boston. 


To  the  Pennsylvania  Fire  Insurance  Com- 
pany, Philadelphia. 

Defendants  were  general  agents  of  the  Pennsylvania  Fire 
Insurance  Company  of  Philadelphia,  and  drew  the  drafts  in 
question  in  payment  of  three  policies  issued  by  that  company. 
The  company  refused  to  honor  the  drafts,  and  they  were  duly 
protested. 

Gray,  C.  J.  Each  of  these  drafts,  upon  its  face,  purports 
to  be  issued  by  the  New  England  agency  of  the  Pennsylvania 
Fire  Insurance  Company,  and  shows  that  Foster  &  Cole  are 
the  general  agents  of  that  corporation  for  the  New  England 
States,  as  well  as  that  the  draft  is  drawn  in  paj'inent  of  a 
claim  against  the  corporation.  It  thus  appears  that  Foster 
&  Cole,  in  drawing  it,  acted  only  as  agents  of  the  corpora- 
tion, as  clearly  as  if  they  had  repeated  words  expressing 
their  agency  after  their  signature ;  and  they  cannot  be  held 
personally  liable  as  drawers  thereof.  Carpenter  v.  Farns* 
worth,  106  Mass.  561,  and  cases  cited. 

Judgment  for  the  defendants. 


874      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 


§192.]    CASCO  NATIONAL  BANK  v.   CLARK 

ET  AL. 

139  New  York,  307.  — 1893. 

Action  against  defendants  as  makers  of  a  promissory  note. 
Judgment  for  plaintiff.     The  opinion  states  the  facts. 

Gray,  J.  The  action  is  upon  a  promissory  note,  in  the 
following  form,  viz :  — 


Brookltn,  N.  Y.,  August  2,  1890. 
$7,500.     Three  months  after  date,  we  promise  to  pay  to 
the  order  of  Clark  &  Chaplin  Ice  Company,  seventy-five 
hundred  dollars  at  Mechanics'  Bank :  value  received. 

John  Clark,  Prest. 
E.  H.  Close,  Treas. 


It  was  delivered  in  payment  for  ice  sold  by  the  payee 
company  to  the  Ridgewood  Ice  Company,  under  a  contract 
between  those  companies,  and  was  discounted  by  the  plaintiff 
for  the  payee,  before  its  maturity.  The  appellants,  Clark 
and  Close,  appearing  as  makers  upon  the  note,  the  one 
describing  himself  as  "  Prest."  and  the  other  as  "Treas.," 
were  made  individually  defendants.  Thej-  defended  on  the 
ground  that  they  had  made  the  note  as  officers  of  the  Ridge- 
wood Ice  Company,  and  did  not  become  personally  liable 
thereby  for  the  debt  represented. 

Where  a  negotiable  promissory  note  has  been  given  for  the 
paj'ment  of  a  debt  contracted  by  a  corporation,  and  the  lan- 
guage of  the  promise  does  not  disclose  the  corporate  obliga- 
tion, and  the  signatures  to  the  paper  are  in  the  names  of 
individuals,  a  holder,  taking  bondjide,  and  without  notice  of 
the  circumstances  of  its  making,  is  entitled  to  hold  the  note 
as  the  personal  undertaking  of  its  signers,  notwithstanding 
they  affix  to  their  names  the  title  of  an  office.  Such  an  affix 
will  be  regarded  as  descriptive  of  the  persons  and  not  of  the 
character  of  the  liability.    Unless  the  promise  purports  to 


§  192.]        CASCO  NATIONAL  BANK  V.  CLAKK.  375 

be  by  the  corporation,  it  is  that  of  the  persons  who  subscribe 
to  it ;  and  the  fact  of  adding  to  their  names  an  abbreviation 
of  some  official  title  has  no  legal  signification  as  qualifying 
their  obligation,  and  imposes  no  obligation  upon  the  corpora- 
tion whose  officers  they  may  be.  This  must  be  regarded  as 
the  long  and  well  settled  rule.  Byles  on  Bills,  §§  36,  37, 
71 ;  Pentz  v.  Stanton,  10  Wend.  271 ;  Taft  v.  Brewster,  9 
Johns.  334 ;  Hills  v.  Bannister,  8  Cow.  31 ;  Moss  v.  Liv- 
ingston, 4  N.  Y.  208 :  De  Witt  v.  Walton,  9  Id.  571 ;  Bot- 
tomley  v.  Fisher,  1  Hurlst.  &  Colt.  211.  It  is  founded  in 
the  general  principle  that  in  a  contract  every  material  thing 
must  be  definitely  expressed,  and  not  left  to  conjecture. 
Unless  the  language  creates,  or  fairly  implies,  the  under- 
taking of  the  corporation,  if  the  purpose  is  equivocal,  the 
obligation  is  that  of  its  apparent  makers. 

It  was  said  in  Briggs  v.  Partridge,  64  N.  Y.  357,  363, 
that  persons  taking  negotiable  instruments  are  presumed  to 
take  them  on  the  credit  of  the  parties  whose  names  appear 
upon  them,  and  a  person  not  a  party  cannot  be  charged, 
upon  proof  that  the  ostensible  party  signed,  or  indorsed,  as 
his  agent.  It  may  be  perfectly  true,  if  there  is  proof  that 
the  holder  of  negotiable  paper  was  aware,  when  he  received 
it,  of  the  facts  and  circumstances  connected  with  its  making, 
and  knew  that  it  was  intended  and  delivered  as  a  corporate 
obligation  only,  that  the  persons  signing  it  in  this  manner 
could  not  be  held  individually  liable.  Such  knowledge  might 
be  imputable  from  the  language  of  the  paper,  in  connection 
with  other  circumstances,  as  in  the  case  of  Mott  v.  Hicks,  1 
Cow.  513,  where  the  note  read,  "  the  president  and  direc- 
tors promise  to  pay,"  and  was  subscribed  by  the  defendant 
as  "president."  The  court  held  that  that  was  sufficient  to 
distinguish  the  case  from  Taft  v.  Brewster,  supra,  and 
made  it  evident  that  no  personal  engagement  was  entered 
into  or  intended.  Much  stress  was  placed  in  that  case  upon 
the  proof  that  the  plaintiff  was  intimately  acquainted  with 
the  transaction  out  of  which  arose  the  giving  of  the  corporate 
obligation. 


376      AGENT  AND  THIRD  PARTY  :   CONTRACTS.     [CH.  XV. 

In  the  case  of  Bank  of  Genesee  v.  Patchin  Bank,  19 
IN".  Y.  312,  referred  to  by  the  appellants'  counsel,  the  action 
was  against  the  defendant  to  hold  it  as  the  indorser  of  a 
bill  of  exchange,  drawn  to  the  order  of  "  S.  B.  Stokes, 
Cas.,"  and  indorsed  in  the  same  words.  The  plaintiff  bank 
was  advised,  at  the  time  of  discounting  the  bill,  by  the 
president  of  the  Patchin  Bank,  that  Stokes  was  its  cashier, 
and  that  he  had  been  directed  to  send  it  iu  for  discount ;  and 
Stokes  forwarded  it  in  an  official  way  to  the  plaintiff.  It  was 
held  that  the  Patchin  Bank  was  liable,  because  the  agency 
of  the  cashier  in  the  matter  was  communicated  to  the 
knowledge  of  the   plaintiff  as  well   as  apparent. 

Incidentally,  it  was  said  that  the  same  strictness  is  not 
required  in  the  execution  of  commercial  paper  as  between 
banks,  that  is,  in  other  respects,  between  individuals. 

In  the  absence  of  competent  evidence  showing  or  charging 
knowledge  in  the  holder  of  negotiable  paper  as  to  the  charac- 
ter of  the  obligation,  the  established  and  safe  rule  must  be 
regarded  to  be  that  it  is  the  agreement  of  its  ostensible 
maker  and  not  of  some  other  party,  neither  disclosed  by  the 
language,  nor  in  the  manner  of  execution.  In  this  case  the 
language  is,  "  we  promise  to  pay,"  and  the  signature  by 
the  defendants,  Clark  and  Close,  are  perfectly  consistent 
with  an  assumption  by  them  of  the  company's  debt. 

The  appearance  upon  the  margin  of  the  paper  of  the 
printed  name  "  Ridgewood  Ice  Company"  was  not  a  fact 
earning  any  presumption  that  the  note  was,  or  was  intended 
to  be,  one  by  that  compan}7. 

It  was  competent  for  its  officers  to  obligate  themselves 
personally,  for  any  reason  satisfactory  to  themselves  ;  and, 
apparently  to  the  world,  they  did  so  by  the  language  of  the 
note,  which  the  mere  use  of  a  blank  form  of  note,  having 
upon  its  margin  the  name  of  their  company,  was  insufficient 
to  negative. 

(The  court  then  decides  that  the  fact  that  one  Winslow 
was  a  director  in  the  paj-ee  compan}',  and  also  in  the  plaintiff 
bank,  did  not  charge  the  latter  with  notice  as  to  the  origin  of 
the  paper.)  Judgment  affirmed. 


§  194.]      SOUHEGAN  NAT'L  BANK  V.  BOARDMAN.       377 


d.  Indorsers  of  bills  and  notes. 

§  194.]       SOUHEGAN  NATIONAL  BANK  v. 
BOARDMAN. 


Action  against 
promissory  uote :  — 


46  Minnesota,  293.  — 1891. 

ist  defendant  as  indorser  upon  the  following 


$1,000.  Minneapolis,  May  12,  1884. 

Six  months  after  date  we  promise  to  pay  to  the  order  of 
A.  J.  Boardman,  treasurer,  one  thousand  dollars,  value  re- 
ceived, with  interest  at  eight  per  cent,  after  maturity. 

Minneapolis  Engine  &  Machine  Works. 
By  A.  L.  Crocker,  Setfy. 

[Indorsed  :]  A.  J.  Boardman,  Treasurer. 

Defendant  was  treasurer  of  the  Minneapolis  Engine  & 
Machine  Works,  and  claims  to  have  made  the  indorsement  in 
that  capacity.     Judgment  for  plaintiff. 

Mitchell,  J.  (after  stating  the  facts,  and  deciding  that 
the  trial  court  erred  in  not  submitting  to  the  jury  a  question 
as  to  the  extension  of  the  time  of  payment  without  the 
consent  of  the  defendant).  With  a  view  to  another  trial  it 
is  necessarj'  to  consider  the  questions  involved  in  the  first 
defence.  These  are  (1)  whether,  on  the  face  of  the  paper, 
this  is  the  indorsement  of  the  corporation  or  of  defendant 
individually ;  and  (2)  whether  its  character  is  conclusively 
determined  b}'  the  terms  of  the  instrument  itself,  or  whether 
extrinsic  evidence  is  admissible  to  show  in  what  charac- 
ter —  officially  or  individually  —  the  defendant  made  the 
indorsement. 

Where  both  the  names  of  a  corporation  and  of  an  officer  or 
agent  of  it  appear  upon  a  bill  or  note,  it  is  often  a  perplexing 
question  to  determine  whether  it  is  in  legal  effect  the  contract 
of  the  corporation,  or  is  the  individual  contract  of  the  officer 


378      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

or  agent.  It  is  very  desirable  that  the  rules  of  interpretation 
of  commercial  paper  should  be  definite  and  certain ;  and  if 
the  courts  of  the  highest  authority  on  the  subject  had  laid 
down  any  exact  and  definite  rules  of  construction  for  such 
cases,  we  would,  for  the  sake  of  uniformity,  be  glad  to  adopt 
them.  But,  unfortunately,  not  only  do  different  courts  differ 
with  each  other,  but  we  are  not  aware  of  any  court  whose 
decisions  furnish  any  definite  rule  or  system  of  rules  appli- 
cable to  such  cases.  Each  case  seems  to  have  been  decided 
with  reference  to  its  own  facts.  If  what  the  courts  some- 
times call  "corporate  marks"  greatly  predominate  on  the 
face  of  the  paper,  they  hold  it  to  be  the  contract  of  the  corpo- 
ration, and  that  extrinsic  evidence  is  inadmissible  to  show 
that  it  was  the  individual  contract  of  the  officer  or  agent.  If 
these  marks  are  less  strong,  the}-  hold  it  prima  facie  the 
individual  contract  of  the  officer  or  agent,  but  that  extrinsic 
evidence  is  admissible  to  show  that  he  executed  it  in  his 
official  capacity  in  behalf  of  the  corporation  ;  while  in  still 
other  cases  the}-  hold  that  it  is  the  personal  contract  of  the 
party  who  signed  it,  that  the  terms  "agent,"  "  secretary," 
and  the  like,  are  merely  descriptive  of  the  person,  and  that 
extrinsic  evidence  is  not  admissible  to  show  the  contrary. 
See  Daniel,  Neg.  Inst.  §  398  et  seq.  When  others  have  thus 
failed  we  can  hardly  hope  to  succeed.  Perhaps  the  difficulty 
is  inherent  in  the  nature  of  the  subject 

This  court  has  in  a  line  of  decisions  held  that  where  a  party 
signs  a  contract,  affixing  to  his  signature  the  term  "  agent," 
u  trustee,"  or  the  like,  it  is  prima  facie  his  individual  con- 
tract, the  term  affixed  being  presumptively  merely  descriptive 
of  his  person,  but  that  extrinsic  evidence  is  admissible  to 
show  that  the  words  were  understood  as  determining  the 
character  in  which  he  contracted.  See  Pratt  v.  Beaupre,  13 
Minn.  177  (187)  ;  Bingham  v.  Stewart,  13  Minn.  96  (106), 
and  14  Minn.  153  (214);  Beering  v.  Thorn,  29  Minn.  120 
(12  N.  W.  Rep.  350)  ;  Rowell  v.  Oleson,  32  Minn.  288  (20 
N.  W.  Rep.  227) ;  Peterson  v.  BToman,  44  Minn.  166  (46 
N.  W.  Rep.  303)  ;  Brunswick- Balke  Co.  v.  Boutell,  45  Minn. 


§  194.]      SOUHEGAN  NAT'L  BANK  V.   BOARDMAN.       379 

21  (47  N.  W.  Rep.  261).  Only  one  of  these,  however  (Bing- 
ham v.  Stewart),  was  a  case  of  commercial  paper  where  the 
name  of  a  corporation  appeared  on  its  face,  and  in  that  case 
possibly  the  court  did  not  give  due  weight  to  all  the  "  corpo- 
rate marks"  upon  it.  Where  there  is  nothing  on  the  face  of 
the  instrument  to  indicate  in  what  capacity  a  part}*  executed 
it  except  his  signature  with  the  word  "  agent,"  '■  treasurer," 
or  the  like  suffixed,  there  can  be  no  doubt  of  the  correctness 
of  the  proposition  that  it  is  at  least  prima  facie  his  individual 
contract,  and  the  suffix  merely  a  description  of  his  person. 
But  bills,  notes,  acceptances,  and  indorsements  are  to  some 
extent  peculiar, —  at  least,  the  different  relations  of  the  parties, 
respectively,  to  the  paper  are  circumstances  which  in  them- 
selves throw  light  upon,  and  in  some  cases  control,  its  inter- 
pretation, regardless  of  the  particular  form  of  the  signature. 
For  example,  if  a  draft  were  drawn  on  a  corporation  by  name, 
and  accepted  by  its  duly  authorized  agent  or  officer  in  his 
individual  name,  adding  his  official  designation,  the  acceptance 
would  be  deemed  that  of  the  corporation,  for  only  the  drawee 
can  accept  a  bill ;  while,  on  the  other  hand,  if  drawn  on  the 
drawee  as  an  individual,  he  could  not  by  words  of  official 
description  in  his  acceptance  make  it  the  acceptance  of  some 
one  else.  So  if  a  note  was  made  payable  to  a  corporation  by 
its  corporate  name,  and  is  indorsed  by  its  authorized  official, 
it  would  be  deemed  the  indorsement  of  the  corporation  ;  for 
it  is  only  the  payee  who  can  be  first  indorser,  and  transfer  the 
title  to  the  paper.  But  this  is  not  such  a  case.  It  does  not 
appear  on  the  face  of  this  note  what  the  defendant  was 
treasurer  of.  Extrinsic  evidence  has  to  be  resorted  to  at  the 
very  threshold  of  the  case  to  prove  that  fact. 

Counsel  for  the  defendant  relies  very  largety  upon  the  case 
of  Folk  v.  Moebs,  127  U.  S.  597  (8  Sup.  Ct.  Rep.  1319),  which 
comes  nearer  sustaining  his  contention  than  any  other  case  to 
which  we  have  been  referred.  But  that  case  differs  from  this 
in  the  very  important  particular  that  it  appeared  upon  the 
face  of  the  paper  itself  that  the  payee  and  indorser  was  the 
secretary  and  treasurer  of  the  corporation,  and  that  as  such 


380      AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

he  himself  executed  the  note  in  its  behalf.  The  case  was  also 
decided  largely  upon  the  authority  of  Hitchcock  v.  Buchanan, 
105  U.  S.  416,  which  is  also  clearly  distinguishable  from  the 
present  case,  for  there  the  bill  sued  on  purported  on  its  face 
to  be  drawn  at  the  office  of  the  company,  and  directed  the 
drawee  to  charge  the  amount  to  the  account  of  the  company, 
of  which  the  signers  described  themselves  as  president  and 
secretary. 

Our  conclusion  is  that  there  is  nothing  upon  the  face  of  the 
note  sued  on  to  take  it  out  from  under  the  rule  laid  down  in 
the  decisions  of  this  court  already  referred  to,  that  upon  its 
face  this  is  prima  facie  the  indorsement  of  defendant  indi- 
vidually, but  that  extrinsic  evidence  is  admissible  to  show  that 
he  made  the  indorsement  only  in  his  official  capacity  as  the 
indorsement  of  the  corporation.  Order  reversed. 


8.    Liability  of  agent  who  contracts  in  his  own  name  in  a 
simple  contract. 

§197.]  HIGGINS   v.  SENIOR. 

8  Meeson  &  Welsby  (Exch.),  834.  — 1841. 

Special  assumpsit  to  recover  compensation  for  the  non- 
delivery of  iron.  Judgment  for  plaintiffs.  Rule  for  a  non- 
suit or  a  new  trial.  The  contract  of  sale  was  signed  by 
defendant,  but  he  was  known  to  be  acting  for  the  Varteg  Iron 
Co. 

Parke,  B.  The  question  in  this  case,  which  was  argued 
before  us  in  the  course  of  last  term,  may  be  stated  to  be, 
whether  in  an  action  on  an  agreement  in  writing,  purporting 
on  the  face  of  it  to  be  made  by  the  defendant,  and  subscribed 
by  him,  for  the  sale  and  delivery  by  him  of  goods  above  the 
value  of  £10,  it  is  competent  for  the  defendant  to  discharge 
himself,  on  an  issue  on  the  plea  of  non  assumpsit  by  proving 
that  the  agreement  was  really  made  by  him  by  the  authority 


§  197.]  HIGGINS  V.   SENIOR.  381 

of  and  as  agent  for  a  third  person,  and  that  the  plaintiff  knew 
those  facts  at  the  time  when  the  agreement  was  made  and 
signed.  Upon  consideration,  we  think  that  it  was  not,  and 
that  the  rule  for  a  new  trial  must  be  discharged. 

There  is  no  doubt  that,  where  such  an  agreement  is  made, 
it  is  competent  to  show  that  one  or  both  of  the  contracting 
parties  were  agents  for  other  persons,  and  acted  as  such 
agents  in  making  the  contract,  so  as  to  give  the  benefit  of 
the  contract  on  the  one  hand  to  ( Garrett  v.  Handley,  4  B. 
&  C.  664  ;  Bateman  v.  Phillips,  15  East,  272),  and  charge 
with  liability  on  the  other  {Paterson  v.  Gandasequi,  1 5  East, 
62) ,  the  unnamed  principals ;  and  this,  whether  the  agree- 
ment be  or  be  not  required  to  be  in  writing  by  the  Statute  of 
Frauds :  and  this  evidence  in  no  way  contradicts  the  written 
agreement.  It  does  not  deny  that  it  is  binding  on  those 
whom,  on  the  face  of  it,  it  purports  to  bind  ;  but  shows  that 
it  also  binds  another,  by  reason  that  the  act  of  the  agent,  in 
signing  the  agreement,  in  pursuance  of  his  authority,  is  in 
law  the  act  of  the  principal. 

But,  on  the  other  hand,  to  allow  evidence  to  be  given  that  <t<A*^. 
the  party  who  appears  on  the  face  of  the  instrument  to  be  li-^^H 
personally  a  contracting  party,  is  not  such,  would  be  to  allow  "^ 

parol  evidence  to  contradict  the  written  agreement,  which  ^'J^^" 
cannot  be  done.  And  this  view  of  the  law  accords  with  the 
decisions,  not  merely  as  to  bills  of  exchange  (Sowerby  v. 
Butcher,  2  C.  &  M.  368  ;  Le  Feme  v.  Lloyd,  5  Taunt.  749) 
signed  by  a  person,  without  stating  his  agency  on  the  face  of 
the  bill,  but  as  to  other  written  contracts,  namely,  the  cases 
of  Jones  v.  Zittledale,  6  Ad.  &  Ell.  486,  1  Nev.  &  P.  677, 
and  Magee  v.  Atkinson,  2  M.  &  W.  440.  It  is  true  that  the 
case  of  Jones  v.  Littledale  might  be  supported  on  the  ground 
that  the  agent  really  intended  to  contract  as  principal,  but 
Lord  Denman,  in  delivering  the  judgment  of  the  court,  lays 
down  this  as  a  general  proposition,  "  that  if  the  agent  con- 
tracts in  such  a  form  as  to  make  himself  personally  respon- 
sible, he  cannot  jifterwards,  whether  his  principal  were  or 
were  not  known  atthe  time  of  the  contract,  relieve  himself 


S82   AGENT  AND  THIRD  PARTY :  CONTRACTS.  [CH.  XV. 

from  that  responsibility."  And  this  is  also  laid  down  in 
Story  on  Agency,  §  269.  Magee  v.  Atkinson  is  a  direct 
authority,  and  cannot  be  distinguished  from  this  case. 

The  case  of  Wilson  v.  Hart,  7  Taunt.  295,  1  Moore,  45, 
which  was  cited  on  the  other  side,  is  clearly  distinguishable. 
The  contract  in  writing  was,  on  the  face  of  it,  with  another 
person  named  Read,  appearing  to  be  the  principal  buyer ;  but 
there  being  evidence  that  the  defendant  fraudulently  put  for- 
ward Read  as  the  buyer,  whom  he  knew  to  be  insolvent, 
in  order  to  pay  a  debt  from  Read  to  himself  with  the  goods 
purchased,  and  having  subsequently  got  possession  of  them, 
it  was  held,  on  the  principle  of  Hill  v.  Perrott,  3  Taunt.  274, 
and  other  cases,  that  the  defendant  was  liable ;  and  as  is 
observed  by  Mr.  Smith  in  the  very  able  work  to  which  we 
were  referred  (Leading  Cases,  Vol.  II.  p.  125),  that  decision 
turned  altogether  upon  the  fraud,  and  if  it  had  not,  it  would 
have  been  an  authorit3T  for  the  admission  of  parol  evidence 
to  charge  the  defendant  not  to  discharge  Read. 

Rule  discharged. 


§197.]  BRIGGS  v.  PARTRIDGE. 

64  New  York,  357.  —  1876. 
[Reported  herein  at  p.  248.] 


9.   Liability  of  agent  arising  from  interest  in  subject-mattei. 

§199.]  WOOLFE  v.   HORNE. 

L.  R.  2  Queen's  Bench  Division,  355.  — 1877. 

Action  to  recover  damages  for  non-delivery  of  goods  sold 
by  defendants,  as  auctioneers,  to  plaintiff.    Plaintiff  was  non- 


§  199.]  WOOLFE  V.  HORNE.  383 

suited.  Order  to  show  cause  why  non-suit  should  not  be  set 
aside  and  verdict  entered  for  plaintiff.  Defendants  relied 
upon  the  fact  that  they  sold  as  agents  for  a  disclosed 
principal. 

Mellor,  J.  I  am  of  opinion  that  the  verdict  must  be 
entered  for  the  plaintiff.  The  general  doctrine  with  regard 
to  the  authority  of  auctioneers  is  laid  down  in  the  case  of 
Williams  v.  Millington,  1  H.  Bl.  81,  at  pp.  84,  85,  by  Lord 
Loughborough,  who  says :  M  An  auctioneer  has  a  possession 
coupled  with  an  interest  in  goods  which  he  is  employed  to 
sell,  not  a  bare  custody,  like  a  servant  or  shopman.  There 
is  no  difference  whether  the  sale  be  on  the  premises  of  the 
owner,  or  in  a  public  auction-room ;  fojjon  the  premises  of 
the  owner  an  actual  possession  is  given  to  the  auctioneer  and 
his  servants  by  the  owner,  not  merely  an  authority  to  sell. 
I  have  said  a  possession  coupled  with  an  interest ;  but  an 
auctioneer  has  also  a  special  property  in  him,  with  a  ljen  for 
the  charges  of  t.hp.  salp.T  the  commission,  and  the  auction  duty. 
which  he  is  bound  to  pay."  Now,  it  was  conceded  by  the 
counsel  for  the  defendants  that  an  auctioneer  is  entitled  to  gyq 
for  the  price  of  goods  which  he  has  put  up  to  auction ;  but  it 
was  contended  that  an  auctioneer  is  no  more  a  contracting 
party,  and  no  more  liable  to  be  sued,  than  a  broker  or  any 
other  kind  of  agent.  But,  having  regard  to  the  general  doc- 
trine which  I  have  stated,  and  to  the  conditions  of  sale  by 
which  the  auctioneer  undertakes  to  deliver  the  goods,  and  par- 
ticularly  to  the  condition  by  which,  in  case  the  auctioneers 
are  unable  to  deliver  any  lot,  the  purchaser  is  to  accept  com- 
pensation, I  think  that  in  the  present  case  the  auctioneer  is 
responsible  for  his  neglect  to  deliver. 

Then  it  was  contended  that  the  plaintiff  had  not  complied 
with  the  conditions  of  sale  as  to  the  removal  of  his  lot  within 
three  days,  and  that  he  had,  therefore,  no  right  of  action. 
My  answer  to  this  objection  is  that  these  stipulations  cannot 
be  looked  upon  as  conditions  precedent.  I  cannot  think  that 
the  mere  fact  that  the  purchaser  did  not  present  himself  till 
Monday  morning  deprived  him  of  the  right  to  claim  his  goods. 


384      AGENT  AND  THIRD  PARTY  :   CONTRACTS.     [CH.  XV. 

I  think,  therefore,  the  action  was  properly  brought  against  the 

auctioneers,  and  that  the  conditions  afford  them  no  defence. 

Field,  J.,  concurred.  Order  absolute. 


10.  Where  neither  principal  nor  agent  is  bound. 

§  200.]  LONG  v.  THAYER. 

150  United  States,  520.  —  1893. 
[Reported  herein  at  p.  141.] 


§  201.]  WILSON  v.   SMALES. 

1892,  1  Queen's  Bench  Division,  456. 

Action  for  damages  against  agents.  The  agents,  having 
doubt  as  to  the  correctness  of  a  telegraphic  authority,  signed 
the  contract  "  by  telegraphic  authority  of  Sam  Reischer, 
—  Smales,  Eeles,  &  Co.,  as  agents."  There  was  a  mistake, 
and  Reischer  refused  to  be  bound.  Plaintiffs  sue  the  agents 
as  upon  a  warranty  of  authority.  Defendants  contend  that 
the  signature  negatives  a  warranty. 

Denman,  J.  ...  It  appeared  from  the  evidence  of  trust- 
worthy witnesses  for  the  defendants,  that  whenever  charters 
are  entered  into  by  brokers  in  accordance  with  telegraphic 
instructions,  it  is  usual  to  sign  in  this  form  with  the  very 
object  of  avoiding  the  implication  of  an  absolute  warrant}*. 
I  see  no  reason  to  doubt  that  this  was  the  real  object  of  the 
defendants  in  signing  as  the}'  did  ;  and  this  being  my  opin- 
ion, I  think  that  there  can  be  no  ground  for  fixing  them  with 
a  warranty,  such  as  they  never  intended  to  give,  and  which 
would  be  wholly  inconsistent  with  the  general  understanding 
of  persons  engaged  in  the  business  in  which  they  were  em- 
ployed.   I  therefore  give  judgment  for  defendants  with  costs. 

Judgment  for  defendants. 


§  204.]  LA  FAEGE  V.  KNEEL  AND.  385 

§  202.]  BALTZEN  v.  NICOLAY. 

53  New  York,  467.  — 1873. 
[Reported  herein  at  p.  352.] 


11.  Liability  of  agent  for  money  received  through  mistake 
or  fraud. 

§  204.]  LA  FARGE  v.  KNEELAND. 

7  Cowen  (N.  Y.),  456.  —  1827. 

Assumpsit  to  recover  a  balance  of  an  advance  made  by 
plaintiffs  on  certain  cotton  consigned  to  them  by  defendant 
acting  for  B.  &  A.     Judgment  for  plaintiffs. 

When  defendant  received  the  advance  from  plaintiffs  it 
was  carried  to  the  credit  of  B.  &  A.,  who  already  had  a  bal- 
ance in  their  favor.  Later  this  balance  was,  by  order  of  B.  & 
A.,  credited  on  defendant's  account  against  B.,  individually, 
who,  after  such  credit,  still  owed  defendant. 

Curia,  per  Savage,  C.  J.  (after  deciding  that  the  court 
erred  in  receiving  certain  testimony).  The  main  question  in 
the  case  is,  whether  the  defendant  can  be  made  liable,  he 
having  disclosed  his  principal  at  the  time  ?  And  if  that 
alone  is  not  a  sufficient  defence,  then  whether  he  has  so  paid 
over  or  disposed  of  the  monej*,  as  to  alter  his  relation  to  his 
principals  in  respect  to  it. 

The  general  rule,  no  doubt,  is  well  settled,  that  an  agent 
who  discloses  his  principal,  and  so  contracts  as  to  give  a 
remedy  against  the  principal,  is  not  liable  personalty,  unless 
it  was  clearly  his  intention  to  assume  personal  responsibility. 
But  where  money  has  been  paid  to  an  agent  for  his  principal, 
under  such  circumstances  that  it  maj'  be  recovered  back  from 
the  latter,  then  it  may  be  recovered  from  the  agent,  provided 
he  has  not  paid  it  to  his  principal,  nor  altered  his  situation 
in  relation  to  him ;  for  instance,  by  giving  fresh  credit.    That 

25 


386   AGENT  AND  THIRD  PARTY  :  CONTRACTS.  [CH.  XV. 

point  was  so  decided  in  Butter  v.  Harrison,  Cowp.  565. 
There  was  in  that  case,  no  doubt  of  a  right  once  to  recover 
from  the  principal ;  but  the  agent  of  the  defendant  had  given 
credit  to  his  principal,  and  rendered  him  his  account  contain- 
ing the  credit.  His  situation,  however,  was  not  altered  in 
any  other  respect.  Lord  Mansfield  said  the  jur}- were  em- 
barrassed with  the  question,  whether  this  was  a  payment 
over.  He  said,  for  some  purposes,  it  would  be  a  payment 
over;  and  the  law  was  clear  that  an  agent  who  received 
money  by  mistake,  and  paid  it  over,  was  not  liable,  but  the 
principal.  As  there  was  no  alteration,  however,  in  the  situa- 
tion of  the  agent  in  relation  to  his  principal,  it  was  held 
wrong  that  he  should  be  in  any  better  situation  than  if  the 
mistake  had  not  happened.  It  was,  therefore,  the  opinion 
of  the  court,  that  the  agent  should  pay  back  the  money.  In 
Cox  v.  Prentice  (3  M.  &  S.  344),  Lord  Ellenborough  says, 
"  I  take  it  to  be  clear  that  an  agent  who  receives  money  for 
his  principal  is  liable  as  a  principal,  so  long  as  he  stands  in 
his  original  situation,  and  until  there  has  been  a  change  of 
circumstances,  by  his  having  paid  over  the  money  to  his 
principal,  or  done  something  equivalent  to  it." 

In  this  case,  the  defendant  has  not  paid  over  the  monej'  to 
Braham  &  Atwood,  in  any  other  manner  than  by  passing  it 
to  their  credit.  There  was  then  a  large  balance  in  their 
favor.  But  Bogart  &  Kneeland  had  also  an  account  with 
Braham  alone,  who  did  business  upon  his  own  account  as 
well  as  in  connection  with  Atwood.  Atwood,  one  of  the 
partners,  was  in  New  York.  The  money  was  received  and 
credited  on  the  12th  of  November,  1818.  An  account  sales 
was  rendered  on  the  28th  of  the  same  month,  when  the 
credit  due  to  Braham  &  Atwood  was,  by  their  order,  trans- 
ferred to  the  credit  on  Braham's  separate  account.  Had  this 
transfer  been  made  to  the  account  of  any  person  distinct 
from  the  firm  of  Braham  &  Atwood,  it  would  be  considered 
equivalent  to  a  pa}*ment.  It  closed  the  concerns  of  Bogart 
&  Kneeland  with  Braham  &  Atwood.  Braham,  in  his  indi- 
vidual capacity,  had  nothing  to  do  with  Braham  &  Atwood. 


§  204.]  LA  FARGE  V.  KNEELAND.  387 

I  think,  therefore,  the  judge  was  correct  in  charging  the  jury 
that  this  was  such  an  appropriation  of  the  money  as  excused 
the  defendant  from  liability. 

The  ground  upon  which  agents  have  been  held  liable,  in 
such  cases,  is,  that  there  has  been  no  change  in  the  relative 
situation  of  the  parties.  Where  there  is  a  mere  passing  of 
credit  on  the  books,  for  instance,  the  agent  still  has  it  in  his 
power  to  redress  himself.  It  is  not,  however,  in  the  power 
of  Kneeland,  the  defendant,  to  alter  the  credit  to  Braham. 
He  cannot  retain  the  money,  as  he  might  have  done  had  no 
transfer  been  made.  Kneeland  virtually  paid  the  money  to 
Atwood,  and  received  the  same  amount  on  account  against 
Braham. 

I  think,  therefore,  the  plaintiffs  ought  not  to  recover,  and 
that  a  new  trial  should  be  granted. 

As  the  judge  erred  in  receiving  testimony,  and  as  the 
question  of  appropriation,  upon  which  the  jury  erred,  is  a 
question  of  law  (Cowper,  566),  I  think  the  costs  should 
abide  the  event.  It  is  not  strictly  a  verdict  against  evidence 
only. 

Eule  accordingly. 


12.  Liability  of  third  person  to  agent. 

§  207.]  KELLY  v.  THUEY. 

102  Missouri,  522.  — 1890. 
[Beported  herein  at  p.  356.] 


§207.]  BRIGGS  v.  PARTRIDGE. 

64  New  York,  357.  — 1876. 

[Reported  herein  at  p.  248.] 


388     AGENT  AND  THIRD  PARTY :   CONTRACTS.     [CH.  XV. 

§208.]  ROWE  v.   RAND. 

Ill  Indiana,  206.— 1887. 
[Reported  herein  at  p.  126.] 


§210.]  STEVENSON  v.  MORTIMER. 

Cowper's  Reports  (K.  B.),  805.  — 1778. 
[Reported  herein  at  p.  326.] 


CHAPTER  XVI. 

TORTS  BETWEEN  AGENT  AND  THIRD   PARTY. 
1.     Liability  of  agent  for  non-feasance. 

§  212.]  DELANEY  v.  ROCHEREAU. 

34  Louisiana  Annual,  1123.— 1882. 

Action  to  hold  agents  liable  to  third  parties  for  injuries 
sustained  by  the  giving  way  of  the  gallery  of  a  house  in 
possession  and  under  control  of  defendants  as  agents.  Judg- 
ment for  defendants. 

Bermudez,  C.  J.  ...  The  contention  is,  that  as  the  in- 
juries received  caused  intense  suffering,  and  as  they  were 
occasioned  by  the  falling  of  the  gallery,  which  was  in  very 
bad  condition,  to  the  knowledge  of  the  defendants,  who,  as 
the  agents  of  the  owner,  were  bound  to  keep  it  in  good 
order,  and  who,  without  justification,  neglected  to  do  so,  their 
firm  and  each  member  thereof  are  responsible  in  solido  for 
the  damages  claimed. 

The  theory  on  which  the  suit  rests  is,  that  agents  are 
liable  to  third  parties  injured  for  their  non-feasance. 

In  support  of  that  doctrine,  both  the  common  and  the  civil 
law  are  invoked. 

At  common  law,  an  agent  is  personalty  responsible  to  third 
parties  for  doing  something  which  he  ought  not  to  have  done, 
but  not  for  not  doing  something  which  he  ought  to  have  done, 
the  agent,  in  the  latter  case,  being  liable  to  his  principal  only. 
For  non-feasance,  or  mere  neglect  in  the  performance  of 
duty,  the  responsibilit}1  therefor  must  arise  from  some  express 
or  implied  obligation  between  particular  parties  standing  in 
privity  of  law  or  contract  with  each  other.    No  man  is  bound 


390        AGENT  AND  THIRD  PARTY:    TORTS.         [CH.  XVI. 

to  answer  for  such  violation  of  duty  or  obligation  except  to 
those  to  whom  he  has  become  directly  bound  or  amenable  for 
his  conduct. 

Every  one,  whether  he  is  principal  or  agent,  is  responsible 
directly  to  persons  injured  by  his  own  negligence,  in  fulfilling 
obligations  resting  upon  him  in  his  individual  character,  and 
which  the  law  imposes  upon  him,  independent  of  contract. 
No  man  increases  or  diminishes  his  obligations  to  strangers 
by  becoming  an  agent.  If,  in  the  course  of  his  agency,  he 
comes  in  contact  with  the  person  or  property  of  a  stranger, 
he  is  liable  for  any  injury  he  may  do  to  either,  by  his  negli- 
gence, in  respect  to  duties  imposed  by  law  upon  him  in  com- 
mon with  all  other  men. 

An  agent  is  not  responsible  to  third  persons  for  any  negli- 
gence in  the  performance  of  duties  devolving  upon  him  purely 
from  his  agency,  since  he  cannot,  as  agent,  be  subject  to  an}' 
obligations  towards  third  persons  other  than  those  of  his  prin- 
cipal. Those  duties  are  not  imposed  upon  him  by  law.  He 
has  agreed  with  no  one,  except  his  principal,  to  perform 
them.  In  failing  to  do  so,  he  wrongs  no  one  but  his  princi- 
pal, who  alone  can  hold  him  responsible. 

The  whole  doctrine  on  that  subject  culminates  in  the  pro- 
position, that  wherever  the  agent's  negligence,  consisting  in 
his  own  wrong-doing,  therefore  in  an  act,  directly  injures  a 
stranger,  then  such  stranger  can  recover  from  the  agent 
damages  for  the  injury.  Story  on  Agency,  308,  309  ;  Id.  on 
Bailments,  165;  Shearman  &  Redfield  on  Negligence,  111, 
112,  ed.  1874 ;  Evans  on  Agency,  notes  by  Ewell,  437,  438  ; 
Wharton  on  Negligence,  535,  78,  83,  780. 

It  is  an  error  to  suppose  that  the  principle  of  the  civil  law, 
on  the  liability  of  agents  to  third  persons,  is  different  from 
those  of  the  common  law.     It  is  certainty  not  broader. 

While  treating  of  "  negligence  in  discharge  of  duties  not 
based  on  contract,"  which  had  not  previously  been  consid- 
ered, Wharton,  beginning  the  third  book  of  his  remarkable 
work  on  Negligence,  says  :  — 

"  The  Roman  law  in  this  respect  rests  on  the  principle  that 


§  212.]  DELA3STEY  V.   ROCHEKEAU.  30i 

vte  necessity  of  society7  requires  that  all  citizens  should  be 
educated  to  exercise  care  and  consideration  in  dealing  with 
the  persons  and  property  of  others.  Whoever  directly  injures 
another's  person  or  property  by  the  neglect  of  such  care,  is 
in  culpa,  and  is  bound  to  make  good  the  injury  caused  by  hi* 
neglect.  The  general  responsibility  is  recognized  by  the 
Aquilian  law,  enacted  about  three  centuries  before  Christ, 
which  is  the  basis  of  Roman  jurisprudence  in  this  relation. 
Culpa  of  this  class  consists  mainly  in  commission  infaciendo. 
Thus,  an  omission  by  a  stranger  to  perform  an  act  of  charity 
is  not  culpa;  it  is  culpa  however  to  inadvertentlj'  place 
obstacles  on  a  road,  over  which  another  falls  and  is  hurt ;  to 
kindle  a  fire  bjT  which  another's  property  may  be  burned  ;  to 
dig  a  trench  which  causes  another's  wall  to  fall."  He  subse- 
quently states  that  the  following  are  cases  in  which  no 
responsibility  can  possibly  attach: 

"  When  a  man  does  everything  in  his  power  to  avoid  doing 
the  mischief,  or  when  it  is  of  a  character  utterly  out  of  the 
range  of  expectation,  the  liability  ceases  and  the  event  is  to 
be  regarded  as  a  casualty. 

"  If  the  injury  is  due  to  the  fault  of  the  party  injured,  tha 
liability  of  the  party  injuring  is  extinguished. 

"  Quod  quie  ex  sua  culpa  damnum  sentit,  non  inteUigitur 
8entire."     Pomponius.     Wharton,  780, 300. 

The  allusion  made  by  certain  writers  to  the  Roman  law, 
which  gives  a  remedy  in  all  cases  of  special  damages,  must 
necessarily  be  understood  as  referring  to  instances  in  which 
the  wrong  or  damage  is  done  or  inflicted  by  an  actual  wrong- 
doing or  commission  of  the  injuring  party. 

The  article  of  the  French  code,  1992,  from  which  article 
3003  of  our  R.  C.  C.  derives,  which  is  to  the  effect  that  the 
agent  is  responsible  not  only  for  unfaithfulness  in  his  manage- 
ment, but  also  for  his  fault  and  mistake,  contemplates  an 
accountability  to  the  principal  only,  and  this  by  reason  of  the 
assumption  of  responsibility  by  the  acceptance  of  the  man- 
date. How,  indeed,  can  an  agent  be  responsible  to  a  third 
person  for  the  management  of  the  affairs  of  his  principal,  or 


392        AGENT  AND  THIRD  PARTY :    TORTS.         [CH.  XVI. 

for  a  mistake  committed  in  the  administration  of  bis  property  ? 
The  responsibility  for  fault  is  likewise  in  favor  of  the  "  man- 
dant "  alone. 

The  Napoleon  Code,  article  11G5,  contains  the  formal  pro- 
vision that  agreements  have  effect  only  on  the  contracting 
parties ;  they  do  not  prejudice  third  parties,  nor  can  they  avail 
them,  except  in  the  case  mentioned  in  article  1121.  This 
last  article  refers  to  stipulations  in  favor  of  autrui,  which  be- 
come obligatory  when  accepted. 

The  Code  of  1808  contained  a  corresponding  article,  but 
that  of  1825  did  not ;  neither  does  the  Revised  Code  of  1870. 
It  must  not  be  concluded,  however,  that  the  omission  to  in- 
corporate the  provision  in  the  subsequent  legislation  must  be 
considered  as  a  repudiation  of  the  doctrine. 

The  distinguished  compilers  and  framers  of  the  Code  of 
1825  account  for  the  omission  to  reproduce,  because  the 
provisions  were  already  embodied  in  other  Articles,  and  might 
be  deemed  to  be  exceptions  to  the  undoubted  rule  that  con- 
tracts can  only  avail,  or  prejudice,  the  parties  thereto.  Projet 
du  Code  de  1825,  p.  264. 

Quod  inter  alios  actum  est,  aliis  neque  nocet,  neque 
prodest,  §  L.  20,  De  instit.  Act ;  see  also  Pothier  on  Oblig. 
Nos.  85,  87  ;  Domat,  L.  1,  t.  16,  sec.  3,  No.  8  ;  L.  2,  t.  8  ; 
Troplong  Mand.  No.  510 ;  Duranton,  10,  No.  541 ;  Toullier, 
6,  341 ;  Toullier,  7,  252,  306 ;  Demolombe,  25,  No.  38 ;  Lau- 
rent, 10,  No.  377 ;  Larombiere,  1,  640. 

That  such  is  the  case  was  formally  recognized  by  the  Court 
of  Cassation  of  France,  in  the  case  of  Thomassin,  decided  in 
Jul}',  1869,  and  reported  in  Part  1  of  Dalloz,  J.  G.,  for  that 
year.     The  syllabus  in  the  case  is  in  the  words  following : 

"  Le  mandataire  n'est  responsable  des  fautes  qu'il  commet 
dans  1' execution  du  mandat,  qu'envers  le  mandant." 

See  also,  J.  G.,  Vo.  Obi.,  Nos.  878,  et  seq.,  and  Vo.  Man- 
dat, No.  213. 

The  case  of  Beaugillot  v.  Callemer,  33  Sirey,  322,  far  from 
expounding  a  doctrine  antagonistical  to  that  prevailing,  as 
was  seen  at   common-law,  and  which  we  consider  as  well 


§  212.]  BAIBD  V.   SHIPMAN.  393 

settled  likewise  under  the  civil  law,  is  fully  confirmatory  of 
the  same. 

It  was  the  case  of  an  agent  condemned  to  pay  damages  for 
obstructing,  by  means  of  beams,  a  water-course  partly  closed 
up  by  masonr}',  and  thus  causing  an  over-flow,  in  conse- 
quence of  which  a  hay  crop  was  damaged.  The  plea  of 
respondeat  superior  did  not  avail.  The  court  well  held  that 
the  commission  of  the  act  constituted  a  quasi  offence,  in 
justification  of  which  the  mandate  could  not  be  set  up. 

This  anterior  view  of  the  case  relieves  the  court  from  the 
necessity  of  passing  upon  the  other  questions  presented  rela- 
tive to  faulty  trespass,  contributory  negligence,  suffering, 
and  damages. 

Judgment  affirmed  with  costs. 


§  212.]  BAIRD   y.  SHIPMAN. 

132  Illinois,  16. —  1890. 

Action  for  damages  for  injuries  resulting  in  the  death  of 
plaintiffs  intestate,  caused  b}r  the  defective  condition  of 
premises  controlled  by  defendants,  as  agents.  Judgment  for 
plaintiff. 

When  defendants  rented  the  premises  to  one  W.,  the  barn- 
door was  in  a  ver)*  insecure  condition,  and  defendants  prom- 
ised W.  to  repair  it.  This  was  not  done,  and  the  door  fell 
and  killed  plaintiff's  intestate,  an  expressman,  who  was  deliv- 
ering goods  at  the  barn. 

The  Appellate  Court  (33  Appellate  Court  Reports,  503) 
delivered  the  following  opinion  :  — 

Garnett,  P.  J.  .  .  .  Appellants  make  two  points.  First, 
that  the  verdict  is  clearly  against  the  weight  of  the  evidence  ; 
second,  that  they  were  the  agents  of  the  owner,  Goodman, 
and  liable  to  him  only  for  an}T  negligence  attributable  to  them. 

There  is  nothing  more  than  the  ordinary  conflict  of  evi- 
dence found  in  such  cases,  presenting  a  question  of  fact  for 


394        AGENT  AND  THIRD  PARTY :    TORTS.         [CH.  XVI. 

the  jur}',  and  the  finding  must  be  respected  by  this  court  in 
deference  to  the  well  settled  rule. 

The  other  point  is  not  so  easily  disposed  of.  An  agent 
is  liable  to  his  principal  only  for  mere  breach  of  his  contract 
with  his  principal.  He  must  have  due  regard  to  the  rights 
and  safety  of  third  persons.  He  cannot,  in  all  cases,  find 
shelter  behind  his  principal.  If,  in  the  course  of  his  agency, 
he  is  intrusted  with  the  operation  of  a  dangerous  machine, 
to  guard  himself  from  personal  liability  he  must  use  proper 
care  in  its  management  and  supervision,  so  that  others  in  the 
use  of  ordinary  care  will  not  suffer  in  life,  limb,  or  propert}-. 
Suydam  v.  Moore,  8  Barb.  358  ;  Phelps  v.  Wait,  30  N.  Y. 
78.  It  is  not  his  contract  with  the  principal  which  exposes 
him  to  or  protects  him  from  liability  to  third  persons,  but 
his  common-law  obligation  to  so  use  that  which  he  controls 
as  not  to  injure  another.  That  obligation  is  neither  increased 
nor  diminished  by  his  entrance  upon  the  duties  of  agency, 
nor  can  its  breach  be  excused  by  the  plea  that  his  principal 
is  chargeable.     Delaney  v.  Rochereau,  34  La.  Ann.  1123. 

If  the  agent  once  actually  undertakes  and  enters  upon 
the  execution  of  a  particular  work,  it  is  his  duty  to  use  rea- 
sonable care  in  the  manner  of  executing  it,  so  as  not  to  cause 
any  injury  to  third  persons  which  may  be  the  natural  con- 
sequence of  his  acts,  and  he  cannot,  by  abandoning  its 
execution  midway,  and  leaving  things  in  a  dangerous  con- 
dition, exempt  himself  from  liability  to  a  third  person  who 
suffers  injury  by  reason  of  his  having  so  left  them  without 
proper  safeguard.     Osborne  v.  Morgan,  130  Mass.  102. 

A  number  of  authorities  charge  the  agent,  in  such  cases, 
on  the  ground  of  misfeasance,  as  distinguished  from  non- 
feasance. Mechem,  in  his  work  on  Agency  (sec.  572),  says  : 
"  Some  confusion  has  crept  into  certain  cases  from  failure  to 
observe  clearly  the  distinction  between  non-feasance  and 
misfeasance.  As  has  been  seen,  the  agent  is  not  liable  to 
strangers  for  injuries  sustained  by  them  because  he  did  not 
undertake  the  performance  of  some  duty  which  he  owed  to 
his  principal,  and  imposed  upon  him  by  his  relation,  which 


§  212.]  BAIED  V.   SHTPMAN.  395 

is  non-feasance.  Misfeasance  may  involve,  also,  to  some 
extent,  the  idea  of  not  doing ;  as,  where  the  agent,  while 
engaged  in  the  performance  of  his  undertaking,  does  not  do 
something  which  it  was  his  duty  to  do  under  the  circum- 
stances,— does  not  take  that  precaution,  does  not  exercise 
that  care,  which  a  due  regard  for  the  rights  of  others  re- 
quires. All  this  is  not  doing ;  but  it  is  not  the  not  doing 
of  that  which  is  imposed  upon  the  agent  merely  by  virtue 
of  his  relation,  but  of  that  which  is  imposed  upon  him  by 
law  as  a  responsible  individual,  in  common  with  all  other 
members  of  society.  It  is  the  same  not  doing  which  consti- 
tutes actionable  negligence  in  any  relation."  To  the  same 
effect  are  Lottman  v.  Harnett,  62  Mo.  159 ;  Martin  v. 
Benoist,  20  Mo.  App.  262;  Harriman  v.  Stowe,  57  Mo. 
93 ;  and  Bell  v.  Josselyn,  3  Gray,  309. 

A  case  parallel  to  that  now  in  hand  is  Campbell  v.  Port- 
land Sugar  Co.,  62  Me.  552,  where  agents  of  the  Portland 
Sugar  Company  had  the  charge  and  management  of  a  wharf 
belonging  to  the  company,  and  rented  the  same  to  tenants, 
agreeing  to  keep  it  in  repair.  They  allowed  the  covering  to 
become  old,  worn,  and  insecure,  by  means  of  which  the  plain- 
tiff was  injured.  The  court  held  the  agents  were  equally  re- 
sponsible to  the  injured  person  with  their  principals. 

Wharton,  in  his  work  on  Negligence  (sec.  535),  insists 
that  the  distinction,  in  this  class  of  cases,  between  non-feas- 
ance and  misfeasance,  can  no  longer  be  sustained ;  that  the 
true  doctrine  is,  that  when  an  agent  is  employed  to  work  on 
a  particular  thing,  and  has  surrendered  the  thing  in  question 
into  the  principal's  hands,  then  the  agent  ceases  to  be  liable 
to  third  persons  for  hurt  received  by  them  from  such  thing, 
though  the  hurt  is  remotely  due  to  the  agent's  negligence, 
the  reason  being,  that  the  causal  relation  between  the  agent 
and  the  person  hurt  is  broken  by  the  interposition  of  the 
principal  as  a  distinct  center  of  legal  responsibilities  and 
duties,  but  that  wherever  there  is  no  such  interruption  of 
causal  connection,  and  the  agent's  negligence  directly  in- 
jures a  stranger,  the  agent  having  liberty  of  action  in  respect 


396        AGENT  AND  THIRD  PARTY:    TORTS.         [CH.  XVI. 

to  the  injury,  then  such  stranger  can  recover  from  the  agent 
damages  for  the  injury.  The  rule,  whether  as  stated  by 
Mechem  or  Wharton,  is  sufficient  to  charge  appellants  with 
damages,  under  the  circumstances  disclosed  in  this  record. 
They  had  the  same  control  of  the  premises  in  question  as  the 
owner  would  have  had  if  he  had  resided  in  Chicago,  and  at- 
tended to  his  own  leasing  and  repairing.  In  that  respect, 
appellants  remained  in  control  of  the  premises  until  the  door 
fell  upon  the  deceased.  There  was  no  interruption  of  the 
causal  relation  between  them  and  the  injured  man.  They 
were,  in  fact,  for  the  time  being,  substituted  in  the  place  of 
the  owner,  so  far  as  the  control  and  management  of  the  prop- 
ertjr  was  concerned.  The  principle  that  makes  an  inde- 
pendent contractor,  to  whose  control  premises  upon  which  he 
is  working  are  surrendered,  liable  for  damages  to  strangers, 
caused  by  his  negligence,  although  he  is  at  the  time  doing 
the  work  under  contract  with  the  owner  (Wharton  on  Negli- 
gence, sec.  440),  would  seem  to  be  sufficient  to  hold  appel- 
lants. The  owner  of  cattle  who  places  them  in  the  hands  of 
an  agister  is  not  liable  for  damages  committed  by  them  while 
they  are  under  the  control  of  the  agister.  It  is  the  posses- 
sion and  control  of  the  cattle  which  fix  the  liability,  and  the 
law  imposes  upon  the  agister  the  duty  to  protect  strangers 
from  injury  by  them.  Ward  v.  Brown,  64  111.  307  ;  Ozburn 
v.  Adams,  70  Id.  291. 

When  appellants  rented  the  premises  to  Mrs.  Wheeler,  in 
the  dangerous  condition  shown  by  the  evidence,  they  volun- 
tarily set  in  motion  an  agency  which,  in  the  ordinary  and 
natural  course  of  events,  would  expose  persons  entering  the 
barn  to  personal  injury.  Use  of  the  barn  for  the  purpose  for 
which  it  was  used  when  the  deceased  came  to  his  death,  was 
one  of  its  ordinar}'  and  appropriate  uses,  and  might,  by 
ordinary  foresight,  have  been  anticipated.  If  the  insecure 
condition  of  the  door-fastenings  had  arisen  after  the  letting  to 
Mrs.  Wheeler,  a  different  question  would  be  presented ;  but 
as  it  existed  before  and  at  the  time  of  the  letting,  the  owner 
or  persons  in  control  are  chargeable  with  the  consequences. 


§  213.]  WEBER   V.   WEBER.  397 

Gridley  v.  Bloomington,  68  111.  47 ;  Tomle  v.  Hampton, 
129  Id.  379. 

Neither  error  is  well  assigned,  and  the  judgment  is 
affirmed. 

Per  Curiam.  We  fully  concur  in  the  legal  proposition 
asserted  in  the  foregoing  opinion,  and  deem  it  unnecessary 
to  add  to  what  is  therein  said  in  support  of  that  proposition. 

The  judgment  is  affirmed. 


2.  Liability  of  agent  for  misfeasance. 
§  213.]  WEBER  v.   WEBER. 

47  Michigan,  569.  -—  1882. 

Campbell,  J.  Plaintiff  sued  defendant  in  case  for  making 
false  representations  to  him  concerning  the  freedom  from 
incumbrance  of  certain  land  which  she  sold  to  him  as  agent 
for  her  husband,  Henry  Weber.  The  declaration  contains 
full  averments  showing  the  purchase  and  payment  to  have 
been  made  in  reliance  on  these  representations,  —  their  wil- 
ful falsehood,  and  the  loss  of  the  entire  premises  by  sale 
under  the  mortgage  which  existed,  and  which  defendant  had 
said  did  not  exist,  by  declaring  that  there  was  no  incum- 
brance whatever.  •* 

Defendant  demurred  to  the  declaration  on  the  grounds, 
first,  that  defendant  was  Henrj-  Weber's  wife,  and  that  he 
should  have  been  made  co-defendant ;  second,  that  defendant 
is  not  averred  to  have  been  interested  in  the  property  ;  third, 
that  it  does  not  appear  the  representations  were  made  at 
Henry  Weber's  request  and  by  his  authority ;  and  fourth, 
that  the  mortgage  being  recorded  was  notice.  The  court 
below  sustained  the  demurrer,  and  gave  judgment  for 
defendant. 

It  is  not  now  claimed  that  the  fact  that  the  mortgage  was 
recorded  was  of  any  importance.     Where  positive  represen- 


398        AGENT  AND  THIRD  PARTY:    TORTS.         [CH.  XVI. 

tations  arejnade  concerning  a  title  for  fraudulent,  purposes, 
and  are  relied  on,  it  can  hardly  be  insisted  that  what  would 
be  merely  constructive  notice  in  the  absence  of  such  declara- 
tions will  prevent  a  person  from  having  the  right  to  rely  on 
statements  which,  if  true,  would  render  a  search  unneces- 
sary^ And  it  is  not  necessarily  true  that  a  recorded 
mortgage  is  unpaid,  merely  because  not  discharged. 

Neither  is  it  true  that  an  agent  is  exempt  from  liability  for 
fraud  knowingly  committed  on  behalf  of  his  principal.  A 
person  cannot  avoid  responsibility  merely  because  he  gets  no 
personal  advantage  from  his  fraud-  All  persons  who  are 
active  in  defrauding  others  are  liable  for  what  they  do, 
whether  the}'  act  in  one  capacity  or  another.  No  one  can 
lawfully_pursue  a  knowingly  fraudulent  employment ;  and, 
while  it  may  be  true  that  the  principal  is  often  liable 
for  the  fraud  of  his  agent,  though  himself  honest,  his  own 
fraud  will  not  exonerate  his  fraudulent  agent.  Starkweather 
v.  Benjamin,  32  Mich.  305 ;  Josselyn  v.  McAllister,  22 
Mich.  300. 

If  liable  at  all,  the  agent  may  as  well  be  sued  separately 
as  any  other  joint  wrong-doer.  It  is  not  usually  necessary 
to  sue  jointly  in  tm-t,.  And  we  do  not  think  that  under  our 
present  statutes  the  case  of  husband  and  wife  makes  any 
different  rule  applicable.  At  common  law  the  husband  was 
liable_personallv  for  his  wife's  tortst  and  she  could  not  be 
sued  wit.hrmf.  him,  put,  under  our  statutes  now,  that  liability 
has  been  abolished,  and  she  is  solely  responsible  for  them. 
Comp.  L.  §§  6129,  7382.  This  being  the  case,  we  can 
see  no  ground  for  joining  them  in  a  suit,  unless  both  are  sued 
as  wrong-doers.  The  evident  purpose  of  the  law  was  to  put 
him,  as  to  her  personal  wrongs,  on  the  same  footing  with  any 
third  person. 

The  demurrer  should  have  been  overruled.  The  judgment 
below  must  be  reversed,  with  costs  of  both  courts,  and  the 
defendant  required  to  answer  over  within  twenty  days. 


§  213.]  swim  v.  wtlson.  399 

§213.]  SWIM  v.   WILSON. 

90  California,  126.  — 1891. 

De  Haven,  J.  The  plaintiff  was  the  owner  of  one  hundred 
shares  of  stock  of  a  mining  corporation,  issued  to  one  H.  B. 
Parsons,  trustee,  and  properly  indorsed  by  him.  This  stock 
was  stolen  from  plaintiff  by  an  employe  in  his  office,  and 
delivered  for  sale  to  the  defendant,  who  was  engaged  in  the 
business  of  buying  and  selling  stocks  on  commission.  At  the 
time  of  placing  the  stock  in  defendant's  possession,  the  thief 
represented  himself  as  its  owner,  and  the  defendant,  relying 
upon  this  representation,  in  good  faith,  and  without  any 
notice  that  the  stock  was  stolen,  sold  the  same  in  the  usual 
course  of  business,  and  subsequently,  still  without  any  notice 
that  the  person  for  whom  he  had  acted  in  making  the  sale 
was  not  the  true  owner,  paid  over  to  him  the  net  proceeds  of 
such  sale.  Thereafter,  the  plaintiff  brought  this  action  to 
recover  the  value  of  said  stock,  alleging  that  the  defendant 
had  converted  the  same  to  his  own  use,  and  the  facts  as 
above  stated  appearing,  the  court  in  which  the  action  was 
tried  gave  judgment  against  defendant  for  such  value,  and 
from  this  judgment,  and  an  order  refusing  him  a  new  trial, 
the  defendant  appeals. 

It  is  clear  that  the  defendant's  principal  did  not,  by  steal- 
ing plaintiff's  property,  acquire  any  legal  right  to  sell  it ;  and 
it  is  equally  clear  that  the  defendant,  acting  for  him,  and  as 
his  agent,  did  not  have  any  greater  right,  and  his  act  was 
therefore  wholly  unauthorized,  and  in  law  was  a  conversion 
of  plaintiff's  property. 

"  It  is  no  defence  to  an  action  of  trover  that  the  defendant 
acted  as  the  agent  of  another.  If  the  principal  is  a  wrong- 
doer, the  agent  is  a  wrong-doer  also.  A  person  is  guilty  of 
a  conversion  who  sells  the  property  of  another  without 
authority  from  the  owner,  notwithstanding  he  acts  under  the 
authority  of  one  claiming  to  be  the  owner,  and  is  ignorant  of 


400        AGENT  AND  THIRD  PARTY:    TORTS.         [CH.  XVI. 

such  person's  want  of  title."  Kimball  v.  Billings,  55  Me. 
147  ;  92  Am.  Dec.  581 ;  Coles  v.  Clark,  3  Cush.  399  ;  Koch 
v.  Branch,  44  Mo.  542  ;  100  Am.  Dec.  324. 

In  Stephens  v.  ElwaU,  4  Maule  &  S.  259,  this  principle 
was  applied  where  an  innocent  clerk  received  goods  from  an 
agent  of  his  employer,  and  forwarded  them  to  such  employer 
abroad,  and  in  rendering  his  decision  on  the  case  presented, 
Lord  Ellenborough  uses  this  language:  "The  only  ques- 
tion is,  whether  this  is  a  conversion  in  the  clerk,  which  un- 
doubtedly was  so  in  the  master.  The  clerk  acted  under  an 
unavoidable  ignorance,  and  for  his  master's  benefit,  when  he 
sent  the  goods  to  his  master ;  but,  nevertheless,  his  acts  may 
amount  to  a  conversion  ;  for  a  person  is  guilty  of  conversion 
who  intermeddles  with  nry  property,  and  disposes  of  it,  and 
it  is  no  answer  that  he  acted  under  the  authorfy  of  another 
who  had  himself  no  authority  to  dispose  of  it." 

To  hold  the  defendant  liable,  under  the  circumstances  dis- 
closed here,  may  seem  upon  first  impression  to  be  a  hardship 
upon  him.  But  it  is  a  matter  of  every -da}-  experience  that 
one  cannot  always  be  perfectly  secure  from  loss  in  his  deal- 
ings with  others,  and  the  defendant  here  is  only  in  the  posi- 
tion of  a  person  who  has  trusted  to  the  honesty  of  another, 
and  has  been  deceived.  He  undertook  to  act  as  agent  for  one 
who,  it  now  appears,  was  a  thief,  and,  relying  on  his  represen- 
tations, aided  his  principal  to  convert  the  plantiff s  property 
into  money,  and  it  is  no  greater  hardship  to  require  him  to 
pay  to  the  plaintiff  its  value  than  it  would  be  to  take  the 
same  away  from  the  innocent  vendee,  who  purchased  and 
paid  for  it.  And  3'et  it  is  universally  held  that  the  purchaser 
of  stolen  chattels,  no  matter  how  innocent  or  free  from  negli- 
gence in  the  matter,  acquires  no  title  to  such  property  as 
against  the  owner ;  and  this  rule  has  been  applied  in  tbis 
court  to  the  case  of  an  innocent  purchaser  of  shares  of  stock. 
Barstow  v.  Savage  Mining  Co.,  64  Cal.  388 ;  49  Am.  Rep. 
705  ;   Sherwood  v.  Meadow  Valley  Mining  Co.,  50  Cal.  412. 

The  precise  question  involved  here  arose  in  the  case  of 
Bercich  v.  Marye,  9  Nev.  312.    In  that  case,  as  here,  the 


§  213.]  SWIM  V.   WILSON.  401 

defendant  was  a  stock-broker  who  had  made  a  sale  of  stolen 
certificates  of  stock  for  a  stranger,  and  paid  him  the  pro- 
ceeds. He  was  held  liable,  the  court,  in  the  course  of  its 
opinion,  saying:  "It  is  next  objected  that  as  the  defendant 
was  the  innocent  agent  of  the  person  for  whom  he  received 
the  shares  of  stock,  without  knowledge  of  the  felon}',  no 
judgment  should  have  been  rendered  against  him.  It  is  well 
settled  that  agency  is  no  defence  to  an  action  of  trover,  to 
which  the  present  action  is  analogous." 

The  same  conclusion  was  reached  in  Kimball  v.  Billings, 
55  Me.  147,  92  Am.  Dec.  581,  the  property  sold  in  that  case 
by  the  agent  being  stolen  government  bonds,  payable  to 
bearer.  The  court  there  said  :  "  Nor  is  it  any  defence  that 
the  property  sold  was  government  bonds  pa}rable  to  bearer. 
The  bond  fide  purchaser  of  a  stolen  bond  payable  to  bearer 
might  perhaps  defend  his  title  against  even  the  true  owner. 
But  there  is  no  rule  of  law  that  secures  immunity  to  the 
agent  of  the  thief  in  such  cases,  nor  to  the  agent  of  one  not 
a  bond  fide  holder.  .  .  .  The  rule  of  law  protecting  bond 
fide  purchasers  of  lost  or  stolen  notes  and  bonds  payable  to 
bearer  has  never  been  extended  to  persons  not  bond  fide  pur- 
chasers, nor  to  their  agents." 

Indeed,  we  discover  no  difference  in  principle  between  the 
case  at  bar  and  that  of  Rogers  v.  Huie,  1  Cal.  429,  54  Am. 
Dec.  300,  in  which  case,  Bennett,  J.,  speaking  for  the  court, 
said  :  "  An  auctioneer  who  receives  and  sells  stolen  property 
is  liable  for  the  conversion  to  the  same  extent  as  an}'  other 
merchant  or  individual.  This  is  so  both  upon  principle  and 
authority.  Upon  principle,  there  is  no  reason  wh}-  he  should 
be  exempted  from  liability.  The  person  to  whom  he  sells, 
and  who  has  paid  the  amount  of  the  purchase  monej',  would 
be  compelled  to  deliver  the  propert}'  to  the  true  owner  or  pa}' 
him  its  full  value ;  and  there  is  no  more  hardship  in  requir- 
ing the  auctioneer  to  account  for  the  value  of  the  goods,  than 
there  would  be  in  compelling  the  right  owner  to  lose  them,  or 
the  purchaser  from  the  auctioneer  to  paj-  for  them." 

It  is  true  that  this  same  case  afterwards  came  before  the 

26 


402        AGENT  AND  THIRD   PARTY:    TORTS.         [CH.  XVI. 

court,  and  it  was  held,  in  an  opinion  reported  in  2  Cal.  571, 
56  Am.  Dec.  363,  that  an  auctioneer  who  in  the  regular 
course  of  his  business  receives  and  sells  stolen  goods,  and 
pays  over  the  proceeds  to  the  felon,  without  notice  that  the 
goods  were  stolen,  is  not  liable  to  the  true  owner  as  for  a 
conversion.  This  latter  decision,  however,  cannot  be  sus- 
tained on  principle,  is  opposed  to  the  great  weight  of  author- 
ity, and  has  been  practically  overruled  in  the  later  case  of 
Cerkel  v.  Waterman,  63  Cal.  34.  In  that  case  the  defend- 
ants, who  were  commission  merchants,  sold  a  quantity  of 
wheat,  supposing  it  to  be  the  property  of  one  Williams,  and 
paid  over  to  him  the  proceeds  of  the  sale,  before  they  knew 
of  the  claim  of  the  plaintiff  in  that  action.  There  was  no 
fraud  or  bad  faith,  but  the  court  held  the  defendants  there 
liable  for  the  conversion  of  the  wheat 

It  was  the  duty  of  the  defendant  in  this  case  to  know  for 
whom  he  acted,  and,  unless  he  was  willing  to  take  the  chances 
of  loss,  he  ought  to  have  satisfied  himself  that  his  principal 
was  able  to  save  him  harmless  if  in  the  matter  of  his  agency 
he  incurred  a  personal  liability  by  the  conversion  of  property 
not  belonging  to  such  principal. 

Judgment  and  order  affirmed. 

Garoutte,  McFarland,  and  Sharpstein,  JJ.,  concurred. 

Beattt,  C.  J. ,  and  Patterson,  J.,  dissented. 

Rehearing  denied. 


INDEX. 


Accounting :  Paob 

as  duty  of  agent 186-188 

following  trust  funds 341-346 

Accounts : 

state  of,  between  agent  and  undisclosed  principal     .   237-246, 

257-260 
Acquiescence : 

ratification  by 56,  57-63 

Action : 

against  agent  of  infant  principal 21-24 

against  undisclosed  principal 232-253 

by  undisclosed  principal 253-264 

to  recover  money  paid  by  mistake  or  fraud      326-327,  385-387 

in  equity  to  recover  trust  funds 341-346 

against  agent  by  third  party 347-384,  389-402 

against  third  party  by  agent 356-359 

Admissions  of  agent: 

when  admissions  of  principal 265-270 

Agency : 

formation  of, 

by  agreement 12-38 

by  ratification 39-100 

by  estoppel 101-109 

by  necessity 110-125 

termination  of, 

by  accomplishment  of  purpose 126-130 

by  revocation 130-136,144-150 

by  change  affecting  subject-matter     .....    137-141 

by  death 141-144 

by  insanity 24-29,144 

irrevocable  agencies 144-150 


404  INDEX. 

Agent:  Pagk 

distinguished  from  servant 1-8 

may  also  be  servant 9-11 

distinguished  from  independent  contractor 12-18 

competency  of 30-32 

liability  to  third  person 21-24 

renunciation  of  agency 160-163 

compensation  of 151-169 

reimbursement  and  indemnity . 170-176 

obligations  to  principal 177-202 

rights  against  principal 151-176 

liability  to  third  person  .......    347-387,389-402 

rights  against  third  person 356-359,  388 

Agreement : 

formation  of  agency  by 14-16 

consideration  for 154-155 

Apparent  authority  of  agent : 

principal  bound  within  scope  of 203-222 

from  what  to  be  inferred 204 

operates  by  way  of  estoppel 101-109 

apparent  authority  of  travelling  salesman  .  203-206,  208-210, 

211,  212-215 

apparent  authority  of  broker 215-221 

apparent  authority  to  warrant 221-222 

apparent  authority  to  sell  on  credit 209 

how  affected  by  custom 211, 212-221 

in  case  of  undisclosed  principal 233-237 

in  case  of  fraud 282-311 

to  appoint  sub-agent 314-319 

warranty  of,  by  agent 347-354 

Attorney s-at-law : 

scope  of  authority  of 227-228 

Auctioneers : 

scope  of  authority  of 226-227 

liability  of,  to  third  persons 383-384 

Authority  of  agent: 

how  conferred 12-125 

how  terminated 126-150 

how  ascertained 203-231 

when  acting  for  undisclosed  principal 232-237 

warranty  of 347-354 

See  Apparent  Authority  of  Agent. 


INDEX.  405 

Bank:  PjMa 

liability  for  collection  of  paper 192-199 

liability  of  gratuitous  directors 199-200 

powers  of  cashier  of 228-231 

liability  upon  paper  signed  by  cashier 369-371 

Bill  of  lading : 

issue  of  fictitious 299-306 

Brokers  : 

scope  of  authority  of 215-221 

Cashier  of  Bank : 

scope  of  authority  of 228-231 

signing  negotiable  instrument 369-371 

Charities : 

liability  for  torts  of  agents 321-325 

Clerk: 

construction  of  statutory  term 3-8 

Clubs.    See  Voluntary  Societies. 

Compensation  of  agent: 

for  authorized  acts      ...........    151-152 

for  unauthorized  acts 153 

for  gratuitous  service 154-155 

after  revocation  of  agency 155-160 

after  renunciation  of  agency 160-163 

•when  acting  for  both  parties 164-169 

Conductor: 

agency  of  necessity  of  railway 111-121 

Contract : 

agency  by 12-18,177-199 

by  agent  for  infant  principal 18-24 

by  agent  for  insane  principal 24-29 

by  agent  for  unincorporated  club 29-30,  355-356 

by  agent  for  foreign  principal 359-360 

formal  appointment  of  agent  to  make 32-38 

by  promoters  for  prospective  corporation 39-45 

by  agent  without  authority.    See  Ratification,  Estoppel, 

Necessity,  Warranty  of  Authority. 
by  agent  in  behalf  of  disclosed  principal    ....     203-231 
by  agent  in  behalf  of  undisclosed  principal      .     .    .    232-264 

by  agent  under  seal 248-253 

by  agent  in  negotiable  instrument 360-380 

by  agent  in  simple  contract 380-382,  356-359 

by  agent  having  interest  in  subject-matter  ....    383-384 

Contractor,  Independent.    See  Independent  Contractor. 


406  '  INDEX. 

Conversion :  pAOl 

liability  of  third  person  to  principal  for      ....    328-331 
liability  of  agent  to  third  person  for 399-402 

Corporation : 

stockholder's  statutory  liability  to  employes    ....       3-9 

ratification  of  contracts  of  promoters 39-45 

liability  for  torts  of  agents 286,  298,  304,  308 

liability  for  torts  of  sub-agents 314-319 

charitable,  liability  for  torts  of  agents 321-325 

Crimes  of  agent: 

liability  of  principal  for 311-314 

Custom: 

proof  of,  to  establish  authority     .   211,  214,  218-221,  229-231 

Death: 

effect  upon  agent's  authority 141-143 

Deceit : 

liability  of  principal  for  agents 282-311 

liability  of  agent  for 347-354 

liability  of  third  person  for 334-341 

Declarations  of  agent: 

when  declarations  of  principal 265-270 

Deed.     See  Sealed  Instruments. 

Delegation  of  duties  by  agent     See  Sub-Agents. 

Dissolution  of  agency.     See  Termination  of  Agency. 

Election: 

to  hold  agent  or  principal 246-248 

of  third  person  to  recede  from  unauthorized  contract    .  73-84 

Estoppel: 

agency  by 13-14,  24-29,  101-109,  203-231 

of  principal  to  deny  that  agent  is  principal     .    .    .    260-264 
in  case  of  torts  by  agent 303 

Evidence : 

to  show  that  agent  is  acting  for  undisclosed  principal  248-256, 

260-264 

to  vary  terms  of  written  instrument 262-264 

admissions  of  agent  as 265-270 

Execution  of  instruments: 

simple  contracts 380-382,  356-359 

sealed  instruments 248-253,  85-87 

negotiable  instruments 360-380 

under  Statute  of  Frauds 32-35,  87-88 


INDEX.  407 

Factors :  Pagb 

scope  of  authority  of 208-210,  223-225 

Factors  Acts: 

construction  of 330-334 

False  representations.     See  Fraud;  Deceit. 

Foreign  principal: 

liability  of  agent  of 359-360 

Forgery : 

ratification  of 90-94 

Form: 

of  appointment  of  agent 32-38 

of  ratification 85-88 

Fraud: 

liability  of  principal  for  agent's 282-311 

liability  of  third  person  to  principal  for      ....    334-341 

Frauds,  Statute  of.     See  Statute  of  Frauds. 

General  agent: 

scope  of  authority 233-237 

See  Special  Agent. 
Good  faith: 

as  duty  of  agent 182-186 

Gratuitous  agent: 

liability  of,  to  principal 199-202 

subsequent  promise  to  compensate 154-155 

Holding  out     See  Estoppel. 
Husband  and  -wife: 

agency  of  wife  by  necessity 110 

Identity,  fiction  of: 

in  relation  of  principal  and  agent  .  .  .  233,  236,  271-281 
Illegality : 

of  contract,  in  ratification 88-94 

Impossibility : 

as  discharging  agency 137-141 

Incompetency : 

of  parties,  in  agency 18-32 

Indemnity : 

to  agent  by  principal 170-176 

Independent  contractor : 

distinguished  from  agent 9-11, 12-18 


408  INDEX. 

Indicia  of  ownership :  pA0K 

principal  conferring  on  agent    . 329-334 

Infant: 

competency  as  principal 18-24 

Insane  principal : 

liability  of 24-29 

Irrevocable  agencies : 

doctrine  of 144-150 

Joint-parties : 

as  principals 126-128 

Joint-tort-feasors : 

principal  and  agent  as 398 

Judgment : 

as  evidence  of  election 246-248 

Knowledge.    See  Notice. 

Legality  of  contract.    See  Illegality. 

Liability : 

of  principal  to  agent 151-176 

of  agent  to  principal 177-202 

of  principal  to  third  person 203-325 

of  third  person  to  principal 326-346 

of  agent  to  third  person 347-387,  389-402 

of  third  person  to  agent 388 

Married  women : 

as  principal 1-3 

as  agent 110 

Master : 

liable  for  torts  of  servant 9-11 

liable  for  torts  of  sub-servant 314-319 

ratification  of  torts  of  servant 94-98 

Misrepresentation : 

of  agent  as  to  authority 347-354 

Mistake : 

effect  upon  ratification •    .    .   66-72 

Necessity : 

formation  of  agency  by  .........    .    110-125 


INDEX.  409 

Negligence  of  agent :  Paob 

liability  to  principal  for 179-182,  199-202 

liability  to  third  persons  for 389-397 

Negotiable  instruments : 

liability  of  agent  who  signs 360-380 

liability  of  agent  who  wrongfully  sells 399-402 

Non-feasance : 

liability  of  agent  to  third  party  for 389-397 

Notice  to  agent: 

when  notice  to  principal 55,  271-281 

of  termination  of  agency 135-136 

Obedience : 

as  duty  of  agent 177-179, 179-182 

Obligations.    See  Liability. 
Officers.     See  Public  Agents. 
Ownership.    See  Indicia  of  Ownership. 

Parol  evidence : 

to  introduce  undisclosed  principal  into  a  contract     .  248-253, 

255,  262-264,  356-359,  360-382 
to  remove  ambiguity 362,  367,  369-371,  377-380 

Parties  to  contract  of  agency : 

competency  of 18-32 

joint-parties 126-128 

shown  by  parol.    See  Parol  Evidence. 

Payment : 

authority  of  agent  to  receive 101-109,  215-221 

Power  coupled  with  an  interest : 

renders  agency  irrevocable 144-150 

Principal : 

competency  of 18-32 

by  agreement 12-38 

by  ratification 39-100 

by  estoppel 101-109 

by  necessity 110-125 

revocation  by 130-136,  144-150 

obligations  to  agent 151-176 

rights  against  agent 177-202 

liabilities  to  third  persons 203-325 

rights  against  third  persons 326-346 

Privity  of  contract  : 

between  principal  and  sub-agents 192-199 

between  undisclosed  principal  and  third  persons  .    .    232-264 


410  INDEX. 

Promoters :  paob 

ratification  of  contract  of 39-45 

Prudence  : 

as  duty  of  agent 179-182 

Public  principal : 

liability  for  torts  of  agent 319-320 

Quasi-contract : 

liability  of  third  person  in 326-327 

liability  of  agent  in 385-387 

Ratification : 

by  corporation  of  contract  of  promoters 39-45 

by  one  in  whose  behalf  contract  not  made 45-47 

by  receiving  fruits  of  contract 47-57 

by  silence 57-63 

must  be  in  toto 51,  63-65 

must  be  free  from  mistake  and  fraud 66-72 

may  third  party  withdraw  before 73-84 

is  new  assent  of  third  person  necessary 81-84 

principal  must  be  competent 20 

form  of  ratification 85-88 

of  illegal  or  void  act 88-94 

of  forgery 90-94 

of  tort 94-98 

effect  as  between  principal  and  agent    ....     57,  99-100 

Reimbursement : 

of  agent  by  principal 170-176 

Renunciation : 

of  agency  by  agent 160-163 

Res  gestae : 

meaning  and  application 265-270 

Revocation : 

of  agency  by  principal    ....   130-136, 144-150, 155-160 

Sale  : 

authority  of  agent  to  make,  105-109,  206-208,  211,  223-225, 

328-334,  352-354,  399-402 

Scope  of  authority.    See  Authority  ;  Apparent  Authority. 

Sealed  instruments  : 

authority  of  agents  to  execute 35-38 

parties  cannot  be  introduced  into  by  parol ....    248-253 
liability  of  agent  who  signs 360 


INDEX.  411 

Servant  :  pA0, 

distinguished  from  agent 1-8 

may  also  be  agent 9-11 

master  liable  for  torts  of 9-11 

agency  of  necessity 121-125 

Signature  of  agent : 

to  simple  contract 253-256,  262-264,  380-382 

to  sealed  instrument 248-253 

to  negotiable  instrument 360-380 

Silence : 

whether  evidence  of  ratification 57-63 

Special  agent : 

whether  to  be  distinguished  from  general  agent,  203,  208,  233- 

237,  288 

Statute  of  Frauds : 

contract  by  agent  under 32-35,  87-88 

as  affecting  liability  of  agent 352-354 

Stockholder  : 

statutory  liability  to  agents  and  servants    .....       3-9 
as  agent  of  corporation 16-18 

Sub-agents  : 

power  of  agent  to  appoint 188-199,  314-319 

liability  of  principal  for  torts  of 314-319 

notice  to 280-281 

Termination  of  agency  : 

forms  of 126-150 

See  Agency. 

Third  person : 

liability  to  principal 326-346 

Title  to  property : 

when  sold  without  authority 328-334 

Torts  of  agent : 

liability  of  principal  for 282-325 

ratification  by  principal,  of 94-98 

liability  of  agent  for 389-402 

Torts  of  third  person: 

liability  to  principal  for 328-341 

Travelling  salesman: 

embraced  within  statutory  term  "  clerk  " 3-8 

not  within  statutory  term  "  laborer  " 8-9 

scope  of  authority  of 203-206, 208-215 

Trust  funds: 

may  be  followed  into  hands  of  third  persons  .    .    .    341-346 


412  INDEX. 

Unauthorized  acts:  Fun 

ratification  of.    See  Ratification. 
compensation  for.    See  Compensation. 
liability  of  agent  for 347-354 

Undisclosed  principal: 

liability  of 232-253 

rights  of 253-264,356-359 

liability  of  agent  of 380-382 

Voluntary  societies: 

competency  of,  as  principals 29-30 

liability  of  agent  of 355-356 

War : 

effect  of,  on  agency 30-32 

Warranty : 

authority  of  agent  to  give 221-222 

Warranty  of  authority: 

liability  of  agent  for 347-354,384-385 


UC  SOUTHERN  REGIONAL  LIBRARY  FACILITY 

III  I II  II  II  II  II  III  III  III  I II 
A     000  774  290     1 


